INDIANAPOLIS, May 23, 2022 /PRNewswire/ — Florida’s special session on the property insurance crisis is an opportunity for the Legislature to pass critical reforms to address some of the most pressing issues that have led to the current crisis in the state’s insurance market, the National Association of Mutual Insurance Companies said today.
“The package, while not perfect, makes much-needed progress in substantially reforming the litigation environment that has allowed rampant lawsuit abuse in Florida in recent years and has sent the marketplace into a slow-motion collapse,” said Caitlin Murray, NAMIC regional vice president – Southeast said.
Florida currently represents only 9 percent of property claims, but accounts for 79 percent of insurance lawsuits in the U.S. This bill seeks to correct that by canceling attorney fee multipliers and one-way attorney fee awards under an assignment of benefits, eliminating the incentive for attorneys to push fraudulent claims. The bill also reforms Florida’s problematic bad faith laws that have enriched a select few attorneys at great cost to consumers.
“As the bill currently stands, we believe it will improve the property insurance climate and will leave Florida policyholders in a better place than they are today, particularly in reforming Florida’s broken bad faith and attorney’s fees statutes that incentivize unnecessary litigation and drive costs upward,” Murray said. “NAMIC anticipates this session will lead to fewer lawsuits and, as those costs fall, insurers will be encouraged to do business in a more stable litigation environment in Florida.”
However, NAMIC remains concerned about certain claims handling and underwriting restrictions in the bill that restrict insurers’ ability to set appropriate rates that reflect risk, particularly in deciding which properties and roofs to insure. Property insurance options are still shrinking for Floridians as insurers have lost more than $1 billion in each of the last two years in the state. Several insurers have become insolvent and gone out of business, further exacerbating the problem for those that remain and their policyholders.
“While not all of the market’s problems were addressed in the bill, we commend the Governor’s Office and the bill sponsors for taking this bold step toward improving the insurance marketplace in Florida,” Murray continued.
The National Association of Mutual Insurance Companies represents more than 1,500 member companies, including regional and local mutual insurance companies on main streets across America and many of the country’s largest national insurers. NAMIC member companies write $323 billion in annual premiums. Our members account for 67 percent of homeowners, 55 percent of automobile, and 32 percent of the business insurance markets. Through our advocacy programs we promote public policy solutions that benefit NAMIC member companies and the policyholders they serve and foster greater understanding and recognition of the unique alignment of interests between management and policyholders of mutual companies.
Contact: Cathy Imus, [email protected], 317-319-5550
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SOURCE National Association of Mutual Insurance Companies