On Wednesday December 14, 2022 Florida Governor, Ron DeSantis, signed Senate Bill 2A, Property Insurance, at the second special session of this year designed to “repair” the property insurance market in Florida. This was a HISTORIC reform for all Floridians who have been struggling with an unstable insurance market driven by many “unnecessary” lawsuits and catastrophic events that led to high record premiums.
It is unthinkable how to many homeowners the average annual premiums have more than triple in the last three years. The insurance industry has seen underwriting losses of approximately $2 billion in the last couple of years. Even worst, we have seen carriers go under while others decided to close shop and leave our beautiful Sunshine State.
Finally, there is light at the end of the tunnel.
Even though this new Bill doesn’t mean that everything will be perfect tomorrow, it is definitely some light at the end of a very dark tunnel. Below we list some of the most important items the Bill corrected that will help stabilize the Homeowners and Property Insurance Market.
Here are some of the most important provisions:
- One-Way Attorney Fees: it eliminates one-way attorney fees in suits arising in residential and commercial property insurance.
- Assignment of Benefits (AOB): it prohibits AOB contracts of residential and commercial property insurance policies issued on or after January 1, 2023.
- Bad Faith: requires a breach of contract before a policyholder can sue a property insurer for settlement-related bad faith.
- Offer of Judgment – makes attorney fees available for the prevailing party in offers of judgment (proposals for settlement).
- Arbitration: allows carriers to include mandatory binding arbitration in their policies.
- Claims Handling: it reduces from 90 days to 60 days the time insurance companies have to pay or deny a claim, unless extended by regulators; and reduce from 14 days to 7 days the time a carrier has to review and acknowledge a claim communication and begin an investigation, along with other time requirement changes.
- Claim Filing: it reduced the deadlines for policyholders to report a claim from 2 years to 1 year for a new or reopened claim, and from 3 years to 18 months for a supplemental claim.
- Office of Insurance Regulation (OIR): allows the Florida OIR to withdraw approval of policies with an appraisal clause for companies that routinely invoke it; enhances OIR’s ability to do market conduct examinations of property insurers after a hurricane, including examinations of managing general agents; allows OIR to discipline insurers for abuse of the appraisal process; adds information regarding the use of appraisal to the list of information that a property insurer must include in its quarterly reports to OIR.
These are just some of the new changes that will impact the insurance industry in 2023 and beyond. As an Independent Insurance Agency that provides property insurance solutions to lots of customers across the State of Florida, we can say this is a big WIN for all of us. The insurance marketplace needed to be corrected because we were heading down a very scary rabbit hole. Hopefully, this will bring many more carriers to our Sunshine State and make our market more competitive and more accessible.
Deer Insurance Agency is an independent insurance agency located in Jacksonville, Florida. We provide homeowners, flood, auto, and commercial insurance solutions throughout the State of Florida.