Insurance Litigation


            On July 1, 2021, Florida’s Senate Bill 76 (“SB76”), which modified several provisions that impact Florida’s property insurance litigation, went into effect. This bill was Florida’s latest attempt to stabilize the rising insurance premiums and reduce the burden on Citizens Property Insurance Corporation (“Citizens”) by encouraging private carriers to write new policies on homes in Florida. In practical terms, Florida’s property owners are facing double-digit insurance rate increases, restricted coverage, or being forced to turn to the state’s insurer of last resort, Citizens. The Florida Office of Insurance Regulation (“OIR”) approved 90 rate increases from insurance carriers over the last year. While many customers received rate increases as high as 45%, others received notices of nonrenewal or outright cancellation from private carriers.

            Many insurance carriers are unwilling to insure homes in Florida, where  homeowner’s insurance lawsuits accounted for 76% of all litigation against insurers across the country in 2019. “When Florida accounts for only 8 percent of the nation’s property insurance claims but 76 percent of national property insurance litigation, you know there is a problem,” said Mark Wilson, president and CEO, Florida Chamber of Commerce. Some who oppose the new legislation call it a big win for insurance companies. Others, who support its passage, say it will save the Florida housing market from collapse and encourage private insurers to do business in Florida. Whichever side you take, statistics show that the number of damage-claimed lawsuits filed in Florida over the past seven or eight years has quadrupled. The Florida Legislature clearly hopes to curb expensive litigation with SB76, which alters several insurance-related statutes.

Attorney’s Fees:

            Since 2019, Florida Statute Section 627.428 has awarded attorney’s fees to anyone who obtained a judgment against an insurance carrier for breach of an insurance policy. This meant that if an insured was awarded a $1 judgment at trial, the carrier would then be liable for hundreds of thousands of dollars in attorney’s fees and costs. With the enactment of the revisions included in SB76, however, there is a new framework for determining whether an insured will be entitled to recover fees and costs and if so, what percentage can be recovered. Florida Statute Section 627.428 now refers to a newly created statute, Section 627.70152, and sets forth percentages of recovery based on the amount of the judgment versus the pre-suit disputed amount. Specifically:

  • If the difference between the amount obtained by the claimant and the pre-suit offer is less than 20% of the disputed amount, each party pays its own fees and costs;
  • If the difference between the amount obtained and the pre-suit offer is at least 20% but less than 50% of the disputed amount, then the insurer pays the plaintiff’s fees and costs equal to the percentage of the disputed amount obtained; and
  • If the difference between the award and the pre-suit offer is greater than 50% of the disputed amount, then the insurer pays for the full amount of fees and costs.

            For example, if an insured’s pre-suit demand is $20,000 and the carrier offers $10,000, the amount in dispute is $10,000. If a jury awarded the insured $1,000, then the insured would only have obtained 10% of the disputed amount and each party would pay its own fees and costs. If a jury awarded the insured $3,500, then the insured would have obtained 35% of the disputed amount, and would be entitled to recover 35% of their attorney’s fees and costs. Finally, if a jury awarded the insured anything over $5,000, then the insured would have exceeded 50% of the disputed amount and the carrier would be liable for all attorney’s fees and costs.

            The disputed amount is itself determined by the now-required pre-suit Notice of Intent to Initiate Litigation (“NOI”). This is done through a form provided online by the Department of Financial Services (“Department”) and is a pre-requisite for any insured who wants to file a lawsuit against an insurance carrier based on a claim for damages. Among other things, the insured must identify the alleged acts or omissions giving rise to the suit, an estimate of damages (if known), and the presuit settlement demand, itemized by damages, attorney’s fees, and costs. These NOIs are public records and, though not many appear to have been filed, it appears that at least some do not include a presuit demand. This is mandated by the statute, but apparently not by the Department’s NOI form. As such, applying the new version of the attorney’s fee statute may cause more litigation than the Legislature hoped.

Prohibited Advertising:

            SB76 also attempts to address potentially predatory practices by roofers and contractors, who have solicited business by encouraging insureds to file insurance claims, via the language of Florida Statute Section 489.147. Specifically, contractors cannot engage in “prohibited advertis[ing],” nor can they offer a residential property owner a discount in exchange for the contractor conducting a roof inspection or submitting an insurance claim for the roof on behalf of the homeowner.

            A prohibited advertisement, under this section, means “any written or electronic communication by a contractor that encourages, instructs, or induces a consumer to contact a contractor or public adjuster for the purpose of making an insurance claim for roof damage.” Prohibited advertising specifically includes, “door hangers, business cards, magnets, flyers, pamphlets, and e-mails.” Additionally, contractors and roofers cannot engage in any policy interpretation or advise an insured about their duties under the insurance policy, unless they also hold a public adjuster’s license. Fines up to $10,000 can be imposed for each violation, meaning each individual business card or flier. This could add up quickly, given the prevalence of such advertising programs.  

            At least one roofing company, Gale Force Roofing & Restoration, LLC (“Gale Force”) has attempted to challenge this new law. On June 21, 2021, Gale Force filed a Complaint for Declaratory and Injunctive Relief in the United States District Court, Northern District of Florida, arguing that SB76 infringed on Gale Force Roofing’s right to the freedom of speech. However, on June 29, 2021, Chief United States District Judge, Mark E. Walker, entered an order dismissing the complaint without prejudice, noting that it “is not satisfied that it has jurisdiction to hear [the] case.” Gale Force filed its First Amended Complaint on June 30, 2021. On Sunday, July 11, 2021, Judge Walker issued a preliminary injunction, ordering that no steps could be taken to enforce Florida Statute Section 489.147(2)(a), (3), and (4)(b) as they pertain to “prohibited advertisements” until otherwise ordered.

Time to Report Claims:

            Since 2011, Florida Statute Section 627.70132 has limited the amount of time for anyone to report a hurricane or windstorm claim to an insurance carrier to three (3) years from the time the “hurricane made landfall” or the “windstorm caused the covered damage.” As of July 1, 2021, that time to report a claim or a re-opened claim has been reduced to two (2) years and encompasses claims “for loss caused by any peril.” The time for reporting a “supplemental claim” remains three (3) years.

            Supplemental claim is defined as “a claim for additional loss or damage from the same peril which the insurer has previously adjusted or for which costs have been incurred while completing repairs or replacement pursuant to an open claim for which timely notice was previously provided to the insurer.” Reopened claims is defined as “a claim that an insurer has previously closed, but that has been reopened upon an insured’s request for additional costs for loss or damage previously disclosed to the insurer.” This seems to differentiate that a reopened claim is an additional request for damages that were previously disclosed, while a supplemental claim is an additional request for damages that were discovered later arising out of the same loss. It seems entirely possible that there will be additional litigation over the definitions of reopened and supplemental claims to determine which time limitation applies.

Carrier Reporting Requirements:

            SB76 also included language amending Florida Statute Section 626.424, which sets forth the data that all carriers must report to the State. This data is extensive, ranging from policy types and zip codes where claims occurred, to vendors used for mitigation and the amount paid for claimants’ attorney’s fees. This is clearly designed to help the Legislature determine whether the provisions of SB76 are serving their intended purpose.


            While SB76 does include some helpful provisions, it seems unlikely that those who have benefitted from so many insurance claims being filed will submit to these changes quietly. However, with the intent of the statutory changes clearly being to reduce litigation and entice private carriers to return to writing home insurance policies in Florida, we are hopeful that the courts will assist in carrying out the Legislature’s goal.

(1) The authors thank law clerks Kalie Maniglia and Steven Jeffries for their assistance in preparing this client alert.

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