Originally published by Law360 | Read Story
By Eli Flesch
Law360 (January 11, 2022, 9:21 PM EST) -- Curbing the number of property and auto insurance lawsuits in Florida is among the top priorities for the American Property Casualty Insurance Association, the insurer trade group said in advance of the state Legislature's 2022 session that kicked off Tuesday.
The APCIA announced its priorities in a statement Monday as Florida homeowners meet the possibility of paying higher premiums on multiple fronts in the new year, according to insurance experts and practitioners. Reforms to the state's property and auto market that help reduce the amount of insurance suits would protect consumers from higher costs, the APCIA said.
"A key focus area is on the long-term health and sustainability of Florida's property insurance market and protecting consumers from rising costs," said Logan McFaddin, an APCIA assistant vice president. "Lawsuit abuse is a major cost driver in the home and auto insurance market and more reforms are needed to rein in frivolous litigation."
McFaddin, who focuses on state government relations, said keeping costs at a minimum will be a key focus for the APCIA as it also works with Florida lawmakers on potential reforms to the state's auto insurance system and data and privacy laws.
Florida is one of the most litigious states in the nation for insurance matters. It accounted for 76% of all the homeowners insurance lawsuits in the U.S. last year, while only 8% of the nation's insurance claims came from the state, according to a report from the Office of Insurance Regulation, and included in the APCIA's announcement.
One property insurance bill approved last year, S.B. 76, was meant to curb that proliferation of lawsuits by mandating certain restrictions, particularly on the ability of roofing contractors to solicit claims from homeowners with damaged properties. The APCIA, which supported the bill, said it is now seeking further reforms.
"While the Legislature did try to enact some reforms last year, they clearly didn't go far enough, and we're heartened that they seemingly understand that," Fred E. Karlinsky, a Greenberg Traurig LLP attorney representing insurance companies, told Law360. "The roof solicitation out there is overwhelming to people. You have solicitations in areas that have never seen any type of event that would have caused any damage to the roof."
Alan Rubin, a lobbyist and principal with Blank Rome LLP, told Law360 that the state Legislature could take a number of approaches to reducing the number of lawsuits without impeding a homeowner's ability to seek coverage following a storm claim.
He suggested the Legislature could make it clearer to insurance companies what constitutes water damage, and what constitutes wind damage. Together, those perils often cause massive damage to hurricane-prone regions like the south of Florida.
More clarity about those damages could reduce insurance litigation, Rubin said.
Florida's insurer of last resort, Citizens Property Insurance Corp., also approved premium increases last year, but they still need to be rubber-stamped by the state's Office of Insurance Regulation. Rubin noted, however, that in an election year, with Gov. Ron DeSantis on the ballot, the possibility of a Citizens rate increase seemed unlikely.
The APCIA also said it would work to ensure that any attempt to repeal Florida's "no-fault" auto insurance system included measures to prevent auto premium increases and a deluge of new lawsuits. Under the system, both parties to a car collision make claims with their insurers. Karlinsky, though, who attended the first day of the legislative session Tuesday, said there was little appetite for reforms of the system.
"The auto marketplace in Florida is very competitive," Karlinsky said. "I just don't see automobile policyholders asking or seeking any reforms in that area."
Last year, DeSantis vetoed a bill that aimed to revamp the "no-fault" auto insurance system. Insurers said the bill failed to address major concerns about the current system while driving up premium costs. At the time, he suggested there was a need for reform, but said the bill at his desk could ultimately hurt the auto market.
"Any attempt to eliminate or reform Florida's no-fault auto insurance system must result in cost-savings for drivers," said McFaddin of the APCIA. "Repealing Florida's no-fault auto insurance system without addressing much needed bad faith reforms could lead to higher costs and increased litigation," he added in his statement.