2023 NEW PROPERTY INSURANCE LAW
On December 16, 2022, Gov. Ron DeSantis signed into law a bill overhauling Florida's property insurance laws. Among many provisions, SB 2A created statutory language for insurers to include mandatory binding arbitration in their policies on a conditional basis. One condition is that a homeowner could agree to the arbitration provisions in exchange for an "actuarially sound credit or premium discount" for the policyholder, whatever that means. Furthermore, the law bans policyholders from entering into Assignment of Benefit contracts with vendors, rendering them void, invalid and unenforceable. Previously, policyholders would enter into agreements with contractors who would "step into their shoes" and negotiate with the insurance companies for their services. Now homeowners will be responsible to pay for the costs of emergency repairs, mold remediation and other urgent and necessary services out-of-pocket. Furthermore, the statutory attorneys fees provision has been abolished. Prior to this law, if an insured had to sue their property insurance carrier for nonpayment, delay in payment or underpayment of a claim, the insurance company was responsible for the homeowner's attorneys fees. Now insureds will have to pay out-of-pocket for their attorneys fees and costs if they want to challenge the insurance companies’ coverage decisions. This will be a major infringement on their right of access to the courts, as the insurance companies have much deeper pockets. (The Florida Supreme Court has previously held that it is an undue hardship upon beneficiaries of policies to be compelled to reduce the amount of their insurance by paying attorneys fees when suits are necessary in order to collect that which they are entitled.) Additionally, if the insured wants to pursue a bad faith action against the insurer, it must first obtain a final judgment against them. The new law further slashes the time allowed for homeowners to report a claim from three years to one year, and 18 months to file a supplemental claim. Policyholders of Citizens Insurance Company (the state–backed insurer of last resort) must show that other insurance premiums are more than 20% of Citizens renewal premium to maintain their policy with Citizens, once their policies renew after April 1, 2023. Additionally, all Citizens policyholders will be required to obtain flood insurance from a private insurer to maintain coverage with Citizens, regardless of the property's location. If there is a claim for water damage, the policyholders must prove that the damage was not caused by flooding. This is a burden that many insureds will not be able to meet without assistance from costly experts.
The only provision that could possibly benefit homeowners is that the insurers must make a coverage decision within 60 days after receiving a notice of claim, down from the previous 90 days. Yet this provision provides zero relief for homeowners if and when the insurance companies take longer to decide. However, homeowners are required to respond to insurers requests for material claims information within 10 days of the request, or else their coverage decision will be extended.
Once again, the powerful insurance industry has been granted a means to significantly reduce a homeowner's rights while increasing their overall profits. Insurance companies claim that this new law will reduce policyholders’ premiums and make companies more competitive in Florida. Coming from the mouths of a multibillion-dollar industry, I wouldn't hold my breath!
Did your Auto Insurance Carrier raise your premium for an accident that wasn't your fault?
Many times consumers are perplexed as to why they have had their auto insurance rates increased after an accident that was not their fault. In Florida, there are actually some statutory guidelines consumers should be aware of. These guidelines fall under the domain of Fla. Stat. 626.9541. Insurance carriers have specific processes and procedures they are required to follow.
First, make sure there is an understanding of the difference between a general global insurance rate increase and that of an actual surcharge to an individual policy holder. Typically, insurance rates are governed by the Florida Department of Financial Services. When it comes to increasing rates on a global basis for an entire class of policy holders, insurance carriers have specific processes and procedures they are required to follow. What we are discussing here are the incidences when an insurance carrier specifically surcharges ( adds an additional extra premium) to a specific policy holder due to an accident. Fla. Sta. 626.9541 indicates that it is, in general, an unfair act or practice to surcharge a policy holder solely because the insured was in an accident, unless the insurer in good faith believes the insured was substantially at fault in the accident.
Insurance carriers "fault code" each accident for underwriting purposes; hence if an adjuster wrongly indicates an insured is 51% or greater at fault, they may be surcharged. Sometimes carriers, without substantial fault by their policy holder, choose to pay a liability claim just to avoid a complaint or an expensive legal battle. That is indeed their prerogative to do. However, they should not surcharge the policyholder.The insurer, at the time of notice of any surcharge, is required to advise the insured that he, or she, is entitled to reimbursement of the surcharge amount, if the named insured demonstrates that the operator involved in the accident was, in fact, not substantially at fault. Following are the specific conditions, outlined in the statutory language, that are associated with an accident surcharge, that if proven true, allow for a challenge of the surcharge:
(I) Lawfully parked;
(II) Reimbursed by, or on behalf of, a person responsible for the accident or has a judgment against such person;
(111) Struck in the rear by another vehicle headed in the same direction and was not convicted of a moving traffic violation in connection with the accident;
(IV) Hit by a "hit-and-run" driver, if the accident was reported to the proper authorities within 24 hours after discovering the accident;
(V) Not convicted of a moving traffic violation in connection with the accident, but the operator of the other automobile involved in such accident was convicted of a moving traffic violation;
(VI) Finally adjudicated not to be liable by a court of competent jurisdiction;
(VII) In receipt of a traffic citation which was dismissed or nolle prossed; or
(VIII) Not at fault as evidenced by a written statement from the insured establishing facts demonstrating lack of fault which are not rebutted by information in the insurer's file from which the insurer in good faith determines that the insured was substantially at fault.
These are clear circumstances that, if applicable, are relatively easy to prove. As you can see, even if the first 7 conditions do not apply, the insured still has the ability to provide a written statement to their insurance carrier outlining why they were not substantially at fault in the accident.
Here are some key things to remember. The way the law is written places a substantial burden on you, the consumer, to carefully review any premium increase, and to determine if you have in fact been surcharged wrongfully.
Insurance companies can make mistakes when they determine at fault percentages for underwriting purposes. Sadly, many insureds may not have the knowledge to know when they have been surcharged, or even if they realize it, they may not be savvy enough to understand how to challenge a wrongful surcharge. Now that you're an educated consumer, don't be afraid to ask questions of your auto insurance carrier and challenge any surcharge that you think is incorrect.
Last, when a smart insured knows how to approach their carrier with the facts, they can successfully prevail in these disputes!