CPC agenda will focus on property and auto insurance abuses, possible PIP repeal


For Immediate Release:

February 25, 2021


Contact:

For Consumer Protection Coalition:

Ivette Marques Faulkner, (850-521-1231), media@flchamber.com



CONSUMER PROTECTION COALITION URGES LAWMAKERS TO ADDRESS EXCESSIVE LITIGATION AND END HIDDEN TAX ON INSURANCE POLICYHOLDERS DURING 2021 SESSION


CPC agenda will focus on property and auto insurance abuses, possible PIP repeal


TALLAHASSEE, FL, February 25, 2021 – Halting excessive property insurance litigation that results in a “hidden tax” of $680 on every Florida family, addressing continued abuse in auto windshield repairs, and assuring that any repeal of the state’s no-fault/PIP auto insurance system truly benefits Floridians are the top priorities of the Consumer Protection Coalition (CPC) this legislative session, the group said today.


The CPC, which is spearheaded by the Florida Chamber of Commerce, said it will advocate for and support legislative reforms that rein in a Wild West litigation environment – fueled by runaway attorney fees – that is hurting the state’s homeowners’ and auto insurance markets, driving up premiums and leading to fewer coverage options for consumers. The CPC will also monitor the impact of potential auto insurance system changes on consumers and litigation.


“Florida’s economy is the envy of the nation, but we must address persistent home and auto insurance fraud and abuse that hurts consumers and threatens our state’s overall competitiveness,” said Mark Wilson, President of the Florida Chamber. “Legislators are considering reform proposals this session that would help eliminate this bad behavior. Additionally, as legislators consider potential major changes in our state’s auto insurance system, we are asking that they carefully weigh the impact on consumers and the state’s existing litigation environment.”


The CPC’s three-pronged agenda for the upcoming session will focus on the following:


Addressing excessive litigation and runaway attorney fees: The litigation frenzy is destabilizing Florida’s domestic property insurance marketplace. During 2020, about 60 home-grown insurers recorded combined net underwriting losses of more than $1.2 billion and dozens of domestic insurers have been forced to seek double-digit rate hikes from state insurance regulators to cover their growing losses. A recent report, “Florida’s P+C Market Spiraling Toward Collapse,” estimated that in 2020, every Florida family paid a hidden tax of $680 to cover the litigation losses.


One factor fueling excessive litigation is a “contingency fee multiplier” in state law that allows trial attorneys to petition courts to double or even triple their legal fees, even in routine cases. The CPC is advocating that legislators reform the contingency fee multiplier so that it is only used in rare and exceptional circumstances, as was originally intended.


“Contingency fee multipliers were designed to encourage attorneys to take on difficult cases that might not otherwise be profitable, but they’re instead being used in even the most routine litigation to line trial attorney pockets without actually helping anyone,” said Caitlin Murray, Regional Vice President – Southeast for the National Association of Mutual Insurance Companies. “Not only does this increase costs for every Floridian, it negates the very purpose of the multipliers by letting attorneys seek higher fees without taking those more difficult cases. We need to make sure that fee multipliers are focused on seeking justice, not just giving trial attorneys a bonus.”


Putting the brakes on “windshield scams”: Assignment of Benefits (AOB) abuse continues to be a major problem in auto glass repairs, particularly along the I-4 corridor, in South Florida and in Jacksonville. During 2020, there were more than 27,000 AOB auto glass lawsuits filed in Florida and just 30 attorneys accounted for all of them – including one attorney alone who filed 8,727 lawsuits. In most instances, Florida drivers seeking repairs for chipped or cracked windshields are unaware they are signing an AOB or that a lawsuit is later filed in their name against their insurer. The CPC urges legislators to finish the successful AOB property reform that occurred in 2019 and to address AOB auto glass abuse this session.


“The Florida Justice Reform Institute calls on the Florida Legislature to seize the moment and lead the nation on lawsuit reform,” said William Large, President of FJRI.


Assuring that PIP repeal benefits consumers: If legislators do move forward with a repeal of no-Fault/PIP and replace it with a new system, the CPC urges that they assure the following:

  • That any replacement system either produces cost savings for motorists or improves the value of required coverages, rather than increases the cost of purchasing and maintaining auto insurance in Florida;

  • That the new system improves, and does not exacerbate, Florida’s already excessive litigation environment.


The CPC said it will closely monitor legislative activity on these home and auto insurance issues and will provide updates regularly through the session, which starts March 2.


“Florida will always face significant risk of hurricane-related loss because of its unique geography and location, but homeowners should not have to face a hurricane of insurance premium increases driven by a cottage industry of self-interested attorneys, public adjusters and home repair vendors,” said Michael Carlson, President and CEO of the Personal Insurance Federation of Florida. “There are reasonable solutions to these litigation-for-profit schemes that will protect consumers and control rising insurance costs. We hope the Florida Legislature will take needed steps to address these and other property issues.”


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