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Litigation
Property Law
Florida Legislature Overhauls Property Insurance Law and
By Christina May Bolin
It has been a long time coming, and the devastation of Hurricane Ian was likely the proverbial straw that broke the insurance industry’s back. Reports have circulated for years about the “insurance crisis” facing Florida. Insurance rates continued to climb while carriers pulled out of the market. In December, the Florida Senate finally acted. Florida Senate Bill 2-A was signed into law on December 16, 2022, and made some significant changes in Florida property law. Here’s a summary of some of the high points.
Assignments of Benefits
One of the changes that is going to have an enormous impact on what has become the property claims industry is the elimination of post-claim assignment of benefits. Florida contractors and mitigation companies have created a niche industry in the insurance claims area. Generally, contractors would repair damage caused by ostensibly covered causes of loss and obtain an assignment of benefits to pursue repayment against the carrier directly thus standing in the place of the insured. The amended statute now states:
Christina May Bolin
Except as provided in subsection (11), a policyholder may not assign, in whole or in part, any post-loss insurance benefit under any residential property insurance policy or under any commercial property insurance policy as that term is defined in s. 627.0625(1), issued on or after January 1, 2023. An attempt to assign post-loss property insurance benefits under such a policy is void, invalid, and unenforceable.
This prohibition will apply to admitted carriers only.
The effect that this might have on the surplus lines market remains to be seen. However, this is likely to spark a critical evaluation of the business practices of many Florida contractors.
Attorney Fees
This change likely has the greatest impact on how litigation will proceed in Florida for property claims. Previously, insureds were entitled to an award of attorneys’ fees. Florida Statute 626.9373 and Florida Statute 627.428 eliminate the right to attorney fees for residential and commercial property lawsuits for both admitted and surplus lines carriers. (However, attorney fees may still be awarded under FS 57.105, the frivolous lawsuit statute, and 768.79 the statute that outlines the Offer of Judgements and Demand for Judgement in property claims.)
This will not affect pending litigation or the upcoming Hurricane Ian litigation, but
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FDCC ANNUAL INSIGHTS 2023