Florida Bill Reopens Debate on Insurer Attorney Fees
TALLAHASSEE — More than two years after Florida lawmakers restricted lawsuits against property insurance companies, a House committee has reopened a significant debate about attorney fees in disputes between homeowners and insurers. The House Civil Justice & Claims Subcommittee voted 16-1 to advance a bill (HB 1551) that would revise a 2022 law that shielded property insurers from paying their customers’ attorney fees.
The insurance industry maintains that the existing law has decreased costly litigation and helped stabilize the market after financial difficulties. However, supporters of the new bill argue that the 2022 law favored insurers too heavily, preventing homeowners from effectively challenging companies that wrongfully deny claims. “At some point, we as a Legislature have got to make sure that we’re standing up for the people of Florida and maybe not the insurance companies of Florida,” said Rep. Michele Rayner, D-St. Petersburg.
Opponents of the bill maintain that the current law has been successful in attracting more insurance carriers to Florida and controlling rates. They warn that the proposed legislation would reverse this progress. “Kudos to you. It (the law) is working,” Katelyn Ferry, representing the Florida Justice Reform Institute, told the House panel. “Why are we fixing it?”
Attorney fees have repeatedly been a central issue in insurance discussions. Before the 2022 law, Florida employed a “one-way” attorney fee system for property insurance. This meant that if a policyholder successfully sued an insurer for a wrongfully denied claim, the insurer was responsible for covering the policyholder’s attorney fees.
Supporters of the fee system argued that it ensured consumers could pursue legal action against insurance companies. Opponents, in contrast, contended that it incentivized plaintiffs’ attorneys to file numerous lawsuits, draining industry funds. Faced with carriers dropping policies, increasing rates, and, in some instances, becoming insolvent, lawmakers eliminated the one-way fee system in 2022, followed by other legal adjustments in 2023 to assist insurers.
The insurance industry and other advocates of eliminating one-way attorney fees, including Gov. Ron DeSantis, contend the change has helped restore the property insurance market. The new House bill would shift to a “loser pays” fee system, according to sponsor Rep. Hillary Cassel, R-Dania Beach. Under this system, if a policyholder sues an insurer, the judge would award attorney fees to the winning party.
Cassel said this approach would encourage settlements while restoring “balance.” “This bill does not bring us backward,” said Cassel, an attorney who represents consumers in cases against insurance companies. “But this bill does bring us balance. We are currently in an unbalanced, unjust system.”
The bill has drawn support from groups such as the Florida Justice Association, which represents plaintiffs’ attorneys, and opposition from organizations such as Associated Industries of Florida and the Florida Chamber of Commerce.
“We believe this bill points us back in the direction of less options and a more unstable market,” stated Adam Basford, a lobbyist for Associated Industries of Florida. Rep. Susan Plasencia, R-Orlando, cast the dissenting vote.
The bill must pass two more House panels before reaching the full House. Sen. Jonathan Martin, R-Fort Myers, has introduced a similar bill (SB 426) in the Senate.
