Florida Auto and Home Insurance: 2 Major Changes

Recently, Florida lawmakers passed two bills that will make major changes to the auto and homeowners insurance markets in the state. The bills will now be sent to Governor Ron DeSantis, who must sign them before they become law.

Here is a quick breakdown of both bills and how they will impact insurance in Florida:

Senate Bill 76

This bill addresses some of the issues affecting the state’s homeowners insurance market. Last year, insurers in the state lost over $1.5 billion. The bill passed in the Senate by a vote of 35 to 5 and 75 to 41 in the House.

During its time in the legislature, the bill was revised significantly from the original wording. The bill includes the following:

• Changing the eligibility, rate glidepath and actuarily sound rate indication for Citizens Property Insurance Corp.
• Replaces the one-way attorney fee-statute which will make the recovery of attorney fees and costs contingent on obtaining a judgment for indemnity that exceeds the pre-suit offer made by the insurance company.
• Reduces the claims deadline on all claims down to two years from the date of loss. There is an exception for on supplemental claims which will have an additional year.
• Requires plaintiffs to file a pre-suit demand at least 10 days before filing an actual lawsuit against an insurer. The demand must include an estimate of the demand, the attorney fees and costs demanded as well as the amount in dispute. It also disallows pre-suit notices to be filed before the insurance company makes a determination of coverage; and allows an insurer to require mediation or other form of alternative dispute resolution after receiving notice.

The bill also addresses issues related to roofing claims which have exploded in the state in recent years. Changes include:

• Would make it illegal for roofing contractors or any person acting on their behalf to make a “prohibited advertisement,” including an electronic communication, phone call or document that solicits a claim.
• Prohibits roofing companies or independent adjusters from offering anything of value for performing a roof inspection, or from offering to interpret an insurance policy or file a claim or adjust the claim on the insured’s behalf.
• Prohibits a contractor from issuing a contract for repairs that does not include a detailed cost estimate of the labor and materials required to complete the repairs.

If a roofer or other person representing a roofing company is found in violation of these restrictions, they could face a potential fine of $10,000 fine for each violation.

Some earlier restrictions were removed from the final version of the bill. The following didn’t make the cut:

• Elimination of the state’s attorney fee multiplier
• Allowing insurers to sell policies that offers actual cash value instead of full replacement cost on roofs

If the bill is signed by DeSantis, it will go into effect July 1, 2021.

Senate Bill 54

This bill deals with car insurance and repeals the no-fault personal injury protection (PIP) system in the state. It will be replaced with a mandatory bodily injury requirement starting at $25,000 for all drivers in the state of Florida.

An early version of the bill also required insurers to offer medical payments coverage (MedPay) in the amount of $5,000 or $10,000. This was removed and the passed version of the bill makes offering this coverage optional and includes an optional $5,000 MedPay death benefit.

This law will go into effect on Jan. 1, 2022 if signed by DeSantis.