

Florida Gov. Ron DeSantis’s proposed insurance coverage fraud and authorized system abuse reforms, announced this week for consideration throughout the legislative session that begins in March, would construct on measures authorized within the closing weeks of 2022 and go a great distance towards fixing the state’s insurance coverage disaster.
Laws handed throughout the 2022 particular session eradicated one-way lawyer charges and task of advantages (AOB) preparations for property insurance coverage claims. Gov. DeSantis’s proposal would go additional, eliminating these mechanisms and “lawyer price multipliers” for all traces of insurance coverage.
“For many years, Florida has been thought-about a judicial hellhole resulting from extreme litigation and a authorized system that benefitted the legal professionals greater than people who find themselves injured,” DeSantis mentioned in his announcement. “We at the moment are engaged on authorized reform that’s extra in keeping with the remainder of the nation and that can carry extra companies and jobs to Florida.”
Earlier than the 2022 reforms, state regulation required insurers to pay the charges of householders insurance coverage policyholders who efficiently sued over claims, whereas shielding policyholders from paying insurers’ lawyer charges when the policyholders lose. The laws additionally eradicated AOBs – agreements by which property house owners signal over their claims to contractors, who then work with insurers.
AOBs are a regular apply in insurance coverage, however in Florida this consumer-friendly comfort has lengthy served as a magnet for fraud. The state’s authorized setting – together with among the most beneficiant attorney-fee mechanisms within the nation – has inspired distributors and their attorneys to solicit unwarranted AOBs from tens of hundreds of Floridians, conduct pointless or unnecessarily costly work, then sue insurers that deny or dispute the claims.
In consequence, Florida accounts for practically 80 p.c of the nation’s householders’ insurance coverage lawsuits, however solely 9 p.c of claims, in line with the state’s Workplace of Insurance coverage Regulation.
Eliminating these two mechanisms for property claims addresses a lot of the insurance coverage fraud within the state. Eliminating them for all traces could be a promising signal that the state is actually dedicated to addressing the basis causes of the disaster.
Florida’s insurance coverage disaster didn’t occur in a single day, and it’ll take years for the impacts of fraud and authorized system abuse to be wrung out of the system. Policyholders gained’t see premium advantages any time quickly. Job 1 is to “cease the bleeding” as insurers fail, go away the state, or cease writing crucial private traces coverages like auto and householders.
Triple-I has printed a brand new Points Transient concerning the disaster and the state’s efforts to restore it.
Study Extra:
Florida Auto Laws, on Heels of 2022 Reforms, Suggests State Is Critical About Insurance coverage Disaster Repair
Florida and Authorized System Abuse Highlighted at JIF 2022
Fraud, Litigation Push Florida Insurance coverage Market to Brink of Collapse
Florida Dropped From 2020 “Judicial Hellholes” Listing
Florida’s AOB Disaster: A Social-Inflation Microcosm