Reform bills fail in Legislature

Measures to reduce cost of homeowner and auto insurance never made it to Rick Scott

Consumers hoping the Florida Legislature would agree on bills to slow rate increases for homeowner and auto insurance coverage will have to wait until next year.

The legislative session ended Sunday with two hotly disputed topics unresolved:

How to stop runaway home insurance rate increases stemming from third-party claims assignments and excessive litigation against property insurers.

Whether Florida’s decadesold, no-fault auto insurance system needs to be scrapped and replaced by a requirement that all drivers purchase liability coverage.

Both proposals failed to get out of the Senate after passage of related legislation by the full House of Representatives. But stalemates between senators loyal to either insurers or trial attorneys ensured neither made it to the governor’s desk.

By failing to act on reforms tied to “assignment of benefits” abuse by third-party contractors and plaintiff attorneys, “the Legislature just approved average rate increases of 15 percent to 30 percent for many Floridians — especially those in the tricounty, Tampa-area and Interstate 4 corridor counties,” said Dulce Suarez-Resnick, vice president of sales and marketing for NCF Insurance Associates, a Miami-based agency.

This year marked the fifth straight session that proposals to restrict claims abuses were left on the table, resulting in progressively larger rate increases. This latest session followed a year of rate hikes for South Florida homeowners of up to 25 percent by the state’s largest insurers.

For a second year, plaintiff attorneys persuaded supporters in the Senate not to advance a bill that would restrict attorneys’ access to so-called, one-way attorneys’ fees. Insurers blame the crisis on attorneys’ abuse of a law that allows policyholders who sue their insurers to collect their legal fees from the insurers if they win but bars insurers that win suits from extracting their legal fees from policyholders.

When policyholders sign over their claim benefits to contractors, their risk-free right to sue insurers transfers with them, and that has triggered thousands of suits each year against carriers who say they have no choice but to settle and pass along the lucrative legal fees