How Florida’s New Law on Homeowner's Insurance Coverage Will Impact Your Claim
On April 28, 2021, Florida lawmakers passed Senate Bill 76, to try and stop the State’s soaring homeowner’s insurance rates, the highest in the country. For context, rates for insurance premiums covering homes are rising 20-25% per year for many homeowners and almost doubling in some cases. Costs for insurance policies covering houses, apartments, and commercial property are rising so rapidly, that they are threatening the State’s recent real estate boom, according to the Wall Street Journal. Practically speaking, the new set of proposed rules changes: (1) the way policyholders must make claims to their insurers; (2) how the insurers are required to render a coverage determination; (3) roof claims; and (4) the amount of attorney’s fees recoverable from a coverage dispute.
In an effort to please insurers, who lost more than $1.5 billion writing policies in Florida last year, the new rules reduce the claims deadline on all claims to two years after the date of loss (except for supplemental claims which have an extra year). There is also a new pre-suit demand requirement where insureds must file a pre-suit demand at least 10 days before filing a lawsuit against an insurer that includes an estimate of the demand, the attorney fees and costs demanded, and the total amount in dispute. Although this will add a new technical requirement, use of pre-suit estimates are not new. Claimants and their attorneys usually submit a sworn proof of loss detailing the estimated damage to tiles, kitchen cabinets, walls, ceilings, roofs, and other damaged areas. Notably though, SB 76 also includes a requirement – helpful to the insurers - that the pre-suit notice be filed after the 90 period for an insurance company to determine coverage per Florida Statute 627.70131. Essentially, this gives insurers more time to investigate claims and slows down policyholders from filing lawsuits.
With respect to roof claims, it will now be illegal for contractors, attorneys, or anyone acting on their behalf to make a “prohibited advertisement.” Basically, this prohibits offering anything of value, like cash or gift cards, for performing a roof inspection, reviewing a policy, or otherwise making an illegal solicitation, that can result in a $10,000 fine for violators. These sections were included to curb what insurers say is a wave of frivolous roof claims, which surged to 90,950 in 2020, up from 56,657 in 2019. Contractors are also required to detail cost estimates for the labor and materials required to complete repairs to a home.
Groups supporting policyholders scored some wins by removing from language from the final draft of the bill that would have allowed insurance policy language that offers actual cash value instead of full replacement costs on roofs. For years, insurers have fought for the right to pay only for portions of a damaged roof, for example, rather than replace an entire roof system. Property owners typically claim damage for full replacement costs on roofs, floors, and other systems in accordance with policy language and with Florida’s “matching statute,” Florida Statute 626.9744, that requires replacement items to match in quality, color, and size to achieve “uniformity.” Policyholders even traveled to Tallahassee in advance of the legislative session to advocate for tougher stances against the companies. According to the Tampa Bay Times, Melaine Hardwick, a claimant whose home was reduced to slab after a storm stated, “I’ve never filed an insurance claim in my life, and they denied me…They left me no choice but to hire an attorney.”
Perhaps most impactful to lawyers is a new calculation for the recovery of legal fees in coverage disputes for property damage claims. Florida will replace its 1-way fee statute in favor of insureds, with a system that provides full fees to attorneys for final judgments that are at least 80% of the pre-suit demand, a proportionate recovery of legal fees for final judgments between 20% and 80% of the pre-suit demand (based on the percentage of the estimate/demand), and full legal fees for the insurer where less than 20% of the pre-suit demand is recovered.
This article aims to provide an overview of the new legislation, but policyholders will be best served by speaking with an experienced property damage insurance attorney to understand how these rule changes will no doubt affect their claims. At the time of this article, SB 76 had passed the Florida legislature and is awaiting signature or veto by Governor Ron DeSantis.
The attorneys at Salomon Smith are Florida homeowners with decades of collective legal experience litigating in South Florida. We want to hear from you to help you navigate this complicated area and get you paid for damage to your house, apartment, or business. After all, you paid good money for your premiums and deserve compensation for a legitimate claim. Remember, time is of the essence to preserve your claim! Contact attorney Daniel Smith directly at 305-297-1018 or firstname.lastname@example.org to understand your insurance policy and available coverage, discuss your options, and answer your questions.
 https://www.wsj.com/articles/insurance-costs-threaten-florida-real-estate-boom-11619343002?mod=searchresults_pos1&page=1  https://www.insurancejournal.com/news/southeast/2021/04/30/612316.htm  https://www.tampabay.com/news/florida-politics/2021/04/28/florida-lawmakers-eye-changes-to-property-insurance-in-wake-of-soaring-rates/