“It’s going to take years for the impacts of fraud and authorized system abuse to be wrung out of the system and for policyholders to expertise premium advantages. Job 1 is to ‘cease the bleeding’ as insurers fail, depart the state, or cease writing important private strains coverages like auto and owners.”
The institute is referring to Florida’s Senate Invoice 2A, which handed in state Legislature in December 2022 and was later signed into legislation by Governor Ron DeSantis.
Citing data from the Florida Workplace of Insurance coverage Regulation, Triple-I mentioned that Florida accounts for almost 80% of America’s owners’ insurance coverage lawsuits, however solely 9% of all US owners’ insurance coverage claims are filed within the state. This, the institute famous, is why Florida’s residence insurers have cumulatively incurred internet underwriting losses of greater than $1 billion in each 2020 and 2021.
In 2022 alone, six insurers working in Florida’s residence insurance coverage market turned bancrupt, whereas others left the state of restricted their insurance policies offered.
“Laws authorized throughout Florida’s late 2022 particular session eradicated “one-way lawyer charges” for property insurance coverage claims. Earlier than the reform, state legislation required insurers to pay the charges of policyholders who efficiently sued over claims, whereas shielding policyholders from paying insurers’ lawyer charges when the policyholders lose,” the temporary famous.
Triple-I’s temporary additionally famous how the laws eradicated the observe of task of advantages (AOBs) – agreements the place property house owners signal over their claims to contractors, who then work with insurers.
“AOBs are a regular observe in insurance coverage, however in Florida this consumer-friendly comfort has lengthy served as a magnet for fraud,” the temporary mentioned. “The state’s authorized setting – together with among the most beneficiant attorney-fee mechanisms within the nation – has inspired distributors and their attorneys to solicit unwarranted AOBs from tens of hundreds of Floridians, conduct pointless or unnecessarily costly work, then file lawsuits in opposition to insurers that deny or dispute the claims.”
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