Many storms are brewing in Florida, both literal and metaphoric. Hurricane Ian is barreling up Florida’s west coast - poised to wreak havoc on Florida’s homeowners and their businesses - while Florida’s lawmakers, policyholders, and insurance executives continue blaming everyone but themselves for problems in Florida’s chaotic insurance market.
Now is perhaps the most important time in recent history for owners of residential and commercial properties to understand their rights in Florida’s rapidly changing insurance landscape. It should not take a hurricane or other significant weather event causing windstorm, water, or other property damage for policyholders to take an interest in the insurance coverage protecting their properties.
Floridians have been fortunate to live in a state with a one-way attorney’s fee statute for bringing successful insurance claims. Specifically, Florida Statute 627.428 requires an insurer to pay a claimant’s attorney’s fees if the policyholder wins its claim against their insurer, resulting in less downside risk if they lose a case than that of an insurance company. In affirming this longstanding principle, the Florida Supreme Court has held that, “It is clear to us that the purpose of this provision is to level the playing field so that the economic power of insurance companies is not so overwhelming that injustice may be encouraged because people will not have the necessary means to seek redress in the courts.” See Ivey v. Allstate Ins. Co., 774 So. 2d 679 (Fla. 2000).
Recently, at least six different insurance companies – most recently FedNat – have left the State of Florida and others are raising their costs and premiums due to purported financial issues, resulting in an increase in policies with Citizens Property Insurance Corporation – Florida’s insurer of last resort. Stakeholders and executives with insurance companies in Florida have blamed the state’s high volume of litigation for these problems. For example, Florida accounts for about 8% of property insurance claims, but about 70% of lawsuits. Figures like these regarding property damage insurance litigation in Florida raise a question similar to whether the chicken or the egg came first – are insurers facing thousands of bogus lawsuits because of over-zealous policyholders, or are they simply getting rightfully called out for not paying out covered damages for valid claims?
Perhaps as a result because of the increase in insurance litigation, insurance companies and their stakeholders have mounted an aggressive attack against Florida’s 1-way attorney-fee law. For the first time in decades, Florida’s lawmakers recently changed the legal scheme for insurance claims in Florida, which still requires insurers to pay legal fees to prevailing policyholders in most instances, but assists insurers by limiting recoveries for legal fees and prohibits recovery of legal fees when policyholders transfer or “assign” their claims to contractors, like roofers. In certain instances, policyholders may also be required to pay the legal fees of the insurance company.
With storm season still going strong in months like September, October, and November, home and business owners throughout Florida should protect themselves in the event of a fight – whether it be for a windstorm claim or other occurrences like a broken or leaky pipe, fire, fallen tree, or theft. Some quick tips:
· Always select a broader “all risks” policy instead of a narrower “named perils policy,”
· If your policy has monetary limitations (like $10,000) for water or mold damage, ask your agent to raise those limits given the ticking-time bomb that are cast-iron and other types of metal pipes in Florida,
· Take photos and videos of the damage to your property. As long as you can safely do so, take as many photos and videos as possible to sufficiently be able to document the condition of the damaged property, and
· Hire competent legal counsel to assist in your negotiations with the insurance company to obtain top dollar for your claim. The attorneys at the Salomon Smith law firm have helped policyholders make recoveries against their insurers for all types of claims. We have collectively worked in Florida for decades and resolved insurance claims in the millions of dollars.
It is wise for Floridians to understand the rights available to them under their insurance policy and also Florida law. Back in 1952, the Florida Supreme Court described the purposes of the one-way attorney fee statute: “to discourage the contesting of policies … and to reimburse successful plaintiffs reasonably for their outlays for attorney’s fees when a suit is brought against them, or they are compelled to sue, in Florida courts to enforce their contracts.” See Feller v. Equitable Life Assur. Soc. Of the United States, 57 So. 2d 581 (Fla. 1952). According to the Court, compensating the individual policyholders is necessary because “[i]t is an undue hardship upon beneficiaries of policies to be compelled to reduce the amount of their insurance by paying attorney’s fees when suits are necessary in order to collect that to which they are entitled.” Id.
Indeed, it is the opinion of the author of this article – Florida-based insurance attorney, Daniel Smith – that insurance companies do not incur the same hardship with respect to legal as fees as policyholders wrongfully denied insurance coverage. As a result, Mr. Smith’s insurance practice is fully devoted to representing policyholders after working for years defending insurance companies. Given the changing legal landscape in Florida concerning insurance claims, homeowners should make informed decisions with respect to their insurance coverage and the filing of a claim.
Don’t hesitate to reach out to insurance attorney, Daniel Smith, of the Salomon Smith Law Firm for a free case-consultation or insurance policy review. He can be reached at email@example.com or (305 297-1018).