Frequent Sense Causes Floridians Can Inform Their Elected Representatives Why the Proposed Insurance coverage Laws Is Dangerous | Property Insurance coverage Protection Regulation Weblog

1. Limits owners’ rights. Limits the power for owners to obtain statutory lawyer charges from insurance coverage corporations even when an insurance coverage firm has been discovered to have handled a policyholder unfairly by denying, delaying, or underpaying their declare. The regulation successfully replaces the prevailing client lawyer charge regulation that has been in place for greater than 100 years.
2. Repeals current reforms which have helped lower litigation. The invoice eliminates the demand letter and proposal for settlement sections from the 2019 AOB regulation which are working. There was a marked decline in lawsuits for the reason that Legislature handed litigation reform throughout the 2019 and 2021 common classes and the 2022 particular session. OIR has publicly acknowledged that there was a 30 % lower in litigation, which CFO Patronis additionally famous throughout the September Cupboard assembly.
3. Creates pointless & pricey burdens for policyholders. Requires an pointless written discover of intent demand letter process 60 days earlier than a swimsuit might be filed. Nevertheless, the Discover of Intent can’t be filed earlier than the insurer has made a “willpower of protection” below part 627.70131 (the 90-day immediate pay regulation). This new time-consuming and costly course of will enhance the insurance coverage corporations’ anti-consumer apply of delaying, denying, and underpaying legit claims. Because of this an insured can’t struggle their provider for not less than 150 days after having suffered a catastrophe.
4. Enforces extraordinarily limiting timelines for policyholders to file claims. The laws limits policyholders to 1 12 months to file a discover of intent on an preliminary declare and 18 months to file a discover of a supplemental declare when the preliminary declare requires wanted adjustments. If these deadlines are missed, the insurance coverage claims are barred, and the policyholders are left on their very own. This locations vital statutory immediate claims burdens for policyholders, whereas then again, the Legislature is weakening the immediate fee necessities for insurance coverage corporations.
5. Insurer timelines to regulate claims lack penalties or enforcement. Whereas the invoice decreases the timeframes the insurance coverage corporations have to reply to a declare, it does NOT put in place any enforcement mechanism giving insurance coverage corporations one other solution to delay their response to claims with out holding them accountable. Moreover, the invoice permits the timeframes to be prevented if there are elements “past the management” of the insurance coverage firm. “Past the management” is broadly outlined and will embody one thing so simple as “technical difficulties.” Delayed funds would be the end result.
6. Limits entry to the courts. Property homeowners will NOT have the power to carry an insurance coverage firm accountable for the claims dealing with necessities, thereby harming a policyholder until there was a trial courtroom judgment in an underlying swimsuit. In different phrases, even when an insurance coverage firm has violated its contract with a house owner and acted in dangerous religion, the policyholder can be unable to carry an insurance coverage firm accountable for not appearing in good religion.
7. Imposes obligatory binding arbitration on policyholders. Insurance coverage corporations can forestall entry to courts by inserting obligatory binding arbitration provisions in insurance coverage insurance policies as an enticement for decrease premiums. Many property homeowners might go for the financial savings, not understanding that it’s eradicating their constitutional proper to a jury trial. As well as, the charges and prices of personal arbitration will lead to policyholders by no means being made entire when an insurer wrongly underpays or denies a declare.
8. Unfairly burdens property homeowners after a loss. The laws put owners on the hook for all appraisal and arbitration prices, which may severely restrict the “web” that owners finally recuperate from their insurance coverage firm, making it extraordinarily tough to have sufficient funds on the finish of a dispute to really restore, rebuild or substitute broken or destroyed contents.
9. Helps taxpayer-funded bailouts for insurance coverage corporations. Through the particular session in Could, lawmakers accepted the $2 billion Reinsurance to Help Policyholders Program (RAP) to assist Florida property insurance coverage corporations struggling to acquire sufficient reinsurance and supply some premium reduction for policyholders. Insurance coverage corporations acquired funds by lowering their charges in an try to decrease premiums paid by customers. Nevertheless, whereas personal for-profit insurance coverage corporations are getting hundreds of thousands from the RAP program, policyholders are seeing little to no premium discount and, in some instances, seeing their insurance policies canceled.

Amy Bach of United Policyholders commented on yesterday’s publish, Florida Political Leaders Promote Out Their Constituents To Insurance coverage Trade Needs. She acknowledged partially:

United Policyholders is getting a gradual stream of reviews from Ian victims about outrageously unfair declare dealing with. This invoice will make a nasty scenario a lot worse. There are three issues that deter insurers from abusing their energy and reneging on their guarantees. The simplest one is the likelihood that the insured will rent an lawyer and a jury will difficulty a considerable verdict towards them. The opposite two – dangerous publicity within the media and regulatory enforcement actions don’t have practically the identical deterrent impact. Insurers merely blitz the airwaves with feel-good advertisements to counter detrimental publicity, and foyer and overwhelm regulators to keep away from vital penalties. [In my] 30+ years as a policyholder advocate – by no means thought I’d see this degree of evil.

Politicians not immersed within the nuances of property insurance coverage regulation and apply might not perceive how this laws will hurt Florida owners and enterprise homeowners—not less than, my aspirational hope is that they don’t perceive. The choice is that elected officers actually wish to sock it to small companies and owners after they undergo an insurance coverage loss by taking away most of their authorized rights. There’s not a single state with these kind of anti-consumer legal guidelines.

Democracy solely works if folks let their elected officers know the way they really feel. Because the Governor is the one who has to approve this laws, here’s a hyperlink to let him know the way you are feeling.

Here’s a hyperlink to ship an electronic mail to Florida’s Senate President Kathleen Passidomo.

Here’s a hyperlink to ship an electronic mail to Florida Home Speaker Paul Renner.

Thought For The Day

It doesn’t take a rocket scientist to determine that it’s much more worthwhile for an insurer to not pay claims than to do in any other case.
—Chip Merlin