Florida’s new anti-policyholder laws found in SB 76 were not vetoed and instead were signed into law effective July 1, 2021. This is a big win for insurance companies which delay and underpay claims. The effect of these laws make it more difficult to hold those insurance companies accountable, further delay claims payments when those insurance companies do delay payment, provide new technical defenses to insurance companies when they are sued, reduce the time to submit all claims to insurers, and make it much less probable that policyholder attorneys fees will be fully paid by delaying and underpaying insurance companies. To top it off, nobody in the insurance industry promises that these new laws will reduce insurance rates.

I asked numerous insurance attorneys how they think this law will be interpreted and most comments suggest that the laws are so unique and ambiguous, that once litigation commences, much of the battle will be over exactly what they mean. You will not find these laws written anywhere else—this is purely a Florida legal fiasco that will have judges scratching their heads and insurance company attorneys arguing technicalities to avoid paying attorneys fees and looking for technical defenses to escape payment.

Here is one of the best comments I received from a colleague:

The new 627.428 only references ‘the amount of reasonable attorney fees’ but the accompanying new statute (627.70132) calculates both fees and costs together.

I am still on the fence about the impact of an Offer of Judgment with the new law. It may eliminate the Proposal For Settlement being filed on a Policyholder’s behalf, which is something I have had to utilize in cases that raise 627.401(2) as a defense to payment of fees and costs. As for a PFS filed by the carrier, reasonable fees and costs are stated in both the new 627.428 and 768.79; so we could argue that those reasonable fees and costs can be calculated ONLY pursuant to the new law.

The ‘reopened,’ or ‘supplemental’ language is a mess. Most carriers don’t ‘close’ a claim entirely, just administratively until more information is provided. Is that new information a trigger for reopening or supplementing the claim? The whole thing is poorly written and will cause a great deal of confusion for judges to figure out.

I agree with others that the 2 year/3 year requirement is a very dangerous bar to recovery for the average homeowner. This coupled with the questionable language about what is a ‘reopened’ claim versus a ‘supplemental’ claim can cause claims otherwise payable to be legally denied.

I still hate the ‘made landfall’ language because it doesn’t specify the date as being when the storm makes ‘landfall’ in Florida. This could have a detrimental effect when we are talking about that 2 year limitation and the storm technically makes “landfall” in the Caribbean days or weeks before hitting Florida.

Fla State. 627.70152(1) states that ‘[t]his section applies exclusively to all suits not brought by an assignee arising under a residential or commercial property insurance policy…’. I assume this is meant to differentiate it from the AOB law (627.7152), but the AOB law makes exceptions under subsection (11). So, if you are an assignee that falls under one of the exceptions under 627.7152(11) then 627.70152 does not apply to help with your attorneys’ fees, but nor does 627.7152. So, these 627.7152(11) exceptions have no viable avenue for fighting the big bad insurance company without an attorney fee provision.

The Notice will be at the mercy of the “form” provided by the department. The carriers won’t likely have an argument that the Notice is defective, in form, if we are using what is provided by the department.

Where I have an issue with the Notice requirement is the difference in (4) versus (5). In (4) a Notice following a denial that only requires an estimate, if known; in (5) they state that it applies to things ‘other than denial of coverage.’ A demand is only required under (5)(a) and (5)(b) requires a stating of the ‘disputed amount.’ So…

• Do we have to give a demand in a claim that was wholly denied?

o It is not a requirement under (4), only (5).

 If not, how does a policyholder obtain fees?

• Policyholders don’t have the original 627.428 or PFS available.

 If so, the carrier is not required to respond with an offer, and therefore policyholders do not get a ‘disputed amount.’

• For a denied claim and Notice under (4), they are only required to respond by: accepting coverage, continuing to deny coverage; or asserting the right to reinspect, which can lead to payment.

o If they do pay, but minimally, after a reinspection, do we need to start over with a new Notice under (5)?

o In a weird scenario, you could provide a Notice under (4), as long as it is on the department form, that simply states:

 ‘This Notice is being provided under 627.70152(3)(a) and serves as our intent to initiate litigation. The carrier failed to provide coverage for and improperly denied this claim. No estimate for damages is known at this time.’

 The carrier would then have to accept, reject, or reinspect? Crazy.

• What ‘acts or omissions’ are referenced in (5)?

o Is (5) only for a ‘bad faith’ action?

o Is this meant to reference a ‘partial pay’ or ‘under the deductible’ type of claim?

 What if the carrier ‘covers’ ensuing damage, but ‘denies’ another aspect of the claim (as we have all seen)?

• How does a policyholder state a dispute amount in the Notice if the policyholder hasn’t received a pre-suit offer yet?

o Again, for a denied claim and Notice under (4), they are only required to respond by: accepting coverage, continuing to deny coverage; or asserting the right to reinspect.

o Insurers are only, partly, required to issue an offer if the Notice falls under (5). Even then, instead of an offer, they can ‘require’ appraisal or other ADR. The statute is silent on whether that is applicable regardless of policy terms. Pappas pointed this out really well.

There is a whole can of worms here if I am reading this correctly, and it all impacts the new calculation of fees because to make the calculations you need proper Notice and a disputed amount.

Every attorney in the property insurance business knows how badly these laws were written—including insurance defense attorneys who have called me asking how a claim is closed, what the definition of a closed claim is, and who determines if a claim is closed. The defense bar is the happiest of all because this new law will lead to more litigation on technicalities to defeat coverage payment as well as the payment of attorneys fees. Their fees per case will go up no matter what.

I spoke out and have publicly written against this law because it harms the average residential and commercial policyholder with a bona fide delayed, denied or underpaid claim. I spoke to a lot of legislators and lobbyists. The word was that the Florida Governor and Senate President had to have a bill passed on this topic.

This new law reads like it was written by Flori-duh. It harms Florida policyholders and shows a high tide mark for the Florida insurance industry’s influence over Florida’s elected leaders.

Thought For The Day

That’s another fine mess you’ve gotten me into.
—Oliver Hardy