To prevent higher insurance rates, changes in state laware needed
Homeowners facing a potential increase in insurance costs ultimately suffer the most as Florida insurers grapple with billions in recent losses from natural disasters and out-of-control litigation costs.
With its hundreds of miles of coastline and significant exposure to storms coming out of the Gulf of Mexico and Atlantic Ocean, hurricanes pose a catastrophic risk to the Sunshine State. Six of the 10 costliest hurricanes on record have impacted Florida. Over the past several years, the state of Florida has dealt with multiple catastrophic weather events that have caused billions of dollars in damages, including Hurricanes Michael and Irma.
The billions in losses from recent natural disasters have hit insurers— and all Floridians — hard, but those costs pale in comparison to the impact of Florida’s deteriorating legal environment. Widespread legal abuse, skyrocketing settlements and exorbitant attorney fees have had significant consequences in the insurance marketplace and made it challenging for companies to hold the line on costs.
Insurers have been sounding the alarm among policy makers for the need to implement meaningful reforms to curb widespread lawsuit abuse, restore fairness to Florida’s legal system, and help keep insurance premiums reasonable for Florida families. The industry has been advocating for solutions that protect policyholders’ rights but reign in abusive and questionable legal tactics.
Asan example, the Florida Supreme Court recently suspended the law license of a Florida attorney due to allegations of misconduct after filing thousands of lawsuits against Florida property insurers over the last several years. One of the law firm’s former associates testified that during his tenure, the firm hadas many as 10,000lawsuits against insurance companies. Yes, you read that right— 10,000! And that’s just from one lawfirm.
While only a few bad actors abuse the system, their actions hurt all Floridians, not only in higher costs inthe short term, but potentially on the availability of insurance over the long term.
Legal reforms are critically needed to create a fairer, balanced judicial system and protect Floridians from rising costs. According to the Florida Chamber of Commerce, Florida’s legal climate costs the average family $4,442 a year in lawsuit abuse “taxes.”
The Governor and the Florida Legislature took a positive step forward in 2019 by passing a law that protects homeowners from Assignment of Benefits property scams, but there is morework to be done on issues like excessive attorney fees, time-limited demands and bad-faith abuses of the law. Insurers are ready towork with policymakers to develop solutions that protect policyholders’ rights and encourage quick, clear and fair settlements.
Insurers’ top priority is to be there for their customers when disaster strikes, and that means being financially solvent and able to pay claims when a family is in their darkest hour of need after a catastrophe. Insurers also recognize that the pandemic has placed significant financial stress onmany families, which is why many home, auto and business insurers are voluntarily offering policyholder relief arrangements for refunds and discounts, providing flexible payment solutions, waiving insurance premium late fees, and pausing cancellation of coverage. If you are concerned about being able to pay for your homeowners insurance, contact your insurer to seewhat options may be available to you.
Florida insurers have been there and will continue to be there to help families, individuals and businesses recover after a disaster, and the industry is ready towork with policymakers to develop solutions that will lower costs for Floridians and help create a healthy and sustainable insurance marketplace.