Key Property Insurance Reform In Florida

Senate Bill 2D recently passed during a special legislative session in May convened specifically to address the state of Florida's insurance challenges. Here are highlights of the new laws.

Protecting Policyholders from Non-renewal
Following Hurricane Irma and the amount of roof replacements that took place, insurance carriers really started to buckle down on insurance for homes with older roofs either refusing to insure it or charging sky-high rates. This new Bill stipulates that insurers may not refuse to write or renew policies on homes with roofs that are less than 15 years old solely because of the roof age.

Roof Solicitations
I saw first hand how a few roofing companies were promising no "out-of-pocket" costs to homeowners for roof replacements because they would mark up the roof cost to cover the deductible for the homeowner (a practice that is illegal). This Bill requires roofing solicitations to contain consumer awareness language that the homeowner is responsible for the deductible under the insurance policy. It is insurance fraud for the contractor to reduce or waive the deductible or file a claim with false or misleading information. 

Roof Deductible
The Bill allows insurance companies to offer a policy at a reduced rate to consumers that includes a roof deductible of up to two percent, with certain circumstances, like a total covered loss waiving the deductible. 

Assignment of Benefits Reform
After Hurricane Ian, assignment of benefits, particularly with roofers, was running rampant and initiating lawsuits daily which ultimately drove up insurance costs. This Bill bans the transfer of the one-way attorney fee provision through an assignment to third parties and closes the loophole that some unscrupulous vendors used to circumvent the law. 

Contingency Fee Multiplier
Ths Bill overturns bad case law by returning the use of a contingency fee multiplier to "rare and exceptional" circumstances reducing the chance of extraordinarily inflated attorney fee awards in run-of-the-mill cases. 

Notice of Intent to Litigate
The 2D Bill enforces the required notice of intent to litigated contained within the 2021 Senate Bill 76 by allowing the insurer to collect attorney fees if the case is dismissed because a notice was not properly filed. 

Civil Remedy Notice
The Bill requires an actual breach of contract for extra-contractual damages to be awarded and helps rein in "gotcha" bad faith lawsuits.

Improving Affordability for Policyholders
The Bill authorized $2M for a new Reinsurance to Assist Policyholders (RAP) program for insurers. This reinsurance is provided at no cost to insurers. Participating insurers had to reduce their premiums by June 30, 2022 to reflect savings from the program. Insurers that deferred using RAP until 2023 must reduce policyholder rates by May 1, 2023. 

Home Hardening Grants
The Bill appropriates $150M to provide hurricane mitigation inspections and matching grants to help Floridians afford home hardening improvements to their homestead single family residences valued at $500K or less. The program provides $2 in grants funds for every $1 provided by the homeowner. Applicants may receive up to $10K in program money.

Materials contributed by Cathy Chestnut in Q12023 Naples Realtor.