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Shakespeare Had the Solution For Florida’s Property Insurance Problems

Shakespeare, in Henry VI wrote “the first thing we do, let’s kill all the lawyers.” Now before our local ANTIFA hooligans grab their face-masks, knives and guns, let’s make it clear that we are using the quote as a metaphor. As a non-practicing attorney myself, I do not wish to bring physical harm to myself or my fellow attorneys. I do believe that the Florida legislature realized that in order to bring down home insurance rates in our state they had to first rein in the attorneys.

Florida has 7% of the nationwide claims in property insurance and yet Florida accounts for 70% of the national litigation over property insurance. This statistic is staggering and the implications are enormous. The excessive litigation that arises out of the Florida insurance environment has caused numerous national insurance carriers to opt out of offering home insurance on Florida real estate. 

As you would expect in a supply and demand situation, fewer insurance carriers doing business in our state has resulted in higher home insurance premiums. This impacts everyone’s pocketbook as they are forced to spend more to protect their homes.

State Senator Jim Boyd has been attempting for years to level the playing field in the insurance litigation arena. For the past half-century the attorneys have had the upper hand. The trial  attorneys have spent copious amounts of money on campaign contributions to Republicans and Democrats and as a result the legislature has been unable to rein in the power of the attorneys. Florida citizens have been paying the price for this inaction in the form of higher home insurance rates. 



One cause of the excessive litigation was that for years Florida allowed the assignment of insurance benefits (AOB) on insurance claims. This allowed attorneys to induce homeowners with a potential insurance claim to sign over their benefits under the policy to the attorney. In many instances, the attorney would work with contractors to inflate the costs to repair insured homes. The homeowner would receive a portion of the proceeds from the claim but the cost to the insurance company would be much higher than the claim should have been. Most states do not allow the assignment of insurance benefits because they realize that it inflates unnecessarily the costs of home repairs. Senator Boyd  sponsored the bill that was recently passed during the special session of the Florida legislature. One important aspect of this bill is that it eliminates the assignment of most insurance benefits in Florida. This is a first step in lowering home insurance rates.

Another change in the litigation laws that was adopted in the special session was the elimination of one-way attorneys fees. Prior to the recent legislation if a plaintiff was successful in suing an insurance company, the plaintiff would have his attorneys fees paid by the insurance company. If the insurance company was successful in the lawsuit, the insurance company could not have the plaintiff reimburse the companies’ legal fees. This law was adopted years ago by politicians attempting to curry favor with voters by “sticking it to the evil insurance companies.”

State Senator Jim Boyd (R)

As with many rules or laws enacted with good intentions, the results often backfired. In the case of one-way attorneys fees, many plaintiffs’ attorneys would initiate unnecessary litigation because they knew they would gain attorneys fees as a result of the case and their client would not bear the responsibility of paying the legal fees. The increase in insurance litigation that arose out of the one-way legal fees resulted in higher insurance rates for Florida citizens. 

The new legislation passed by the Florida legislature will not allow a plaintiff to have their legal fees paid by the insurance company if the insurance company made a good-faith settlement offer before trial. This rule still protects the plaintiff from unreasonable insurance company behavior. If the plaintiff rejects the offer from the insurance company and is awarded a judgment in court that is 20% above the insurance company’s offer, the plaintiff can have their legal fees reimbursed by the insurance company. Senator Boyd believes this change will deter frivolous insurance lawsuits.

There is no magic fairy dust that will create perfection in the Florida insurance industry. Florida is a state that is vulnerable to hurricanes and it attracts many people that wish to live in areas that are often in the path of nature’s fury. The legislation that was recently passed continues to build on

prior legislation that attempts to make the state a level playing field for the insurance industry.

 Hopefully, with these changes, well-capitalized, national insurance carriers who have chosen to opt out of doing business in Florida will give the Florida market a second chance. This would leave Florida less reliant on smaller insurance companies that in many instances do not have the capital reserves to handle claims rising out of major catastrophes. We are fortunate to have a legislative leader like Senator Boyd who has worked countless hours shaping the legislation and guiding it through the legislative process. As a result of his efforts, we should all benefit from lower property insurance rates. 

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