Florida Insurance Reform: High-Impact Legislative Recommendations
Florida’s recent tort reform measures are facing challenges. Between 2021 and 2023, comprehensive reforms targeted legal practices that made Florida notorious for excessive homeowners’ insurance litigation. These reforms have begun to show positive results, but the plaintiff bar is now fighting back with legislation aimed at undoing the progress made.
Key Reforms and Their Impact
- SB 76 (2021) changed litigation rules surrounding disputed insurance claims
- SB 2-A (2022) limited the assignment of attorney fees to third parties and discouraged frivolous claims
- HB 837 (2023) introduced multiple reforms, including eliminating phantom damages and reducing the statute of limitations for negligence actions
Tangible evidence of the reforms’ success includes:
- Reduction in insurance rates
- Decrease in lawsuits against insurers
- Decline in legal service of process filings
- Entry of 11 new insurers into Florida’s market
The percentage of nationwide homeowners’ insurance suits opened in Florida dropped from 79.9% in 2018 to 71.5% in 2023. Lawsuits filed against insurers decreased by 23.8% in the first three quarters of 2024 compared to the same period in 2023.
Challenges and Future Directions
Despite progress, there are attempts to backtrack on tort reform. The Florida House Judiciary Committee advanced HB 947, which could reopen the door to assignment of benefits and allow phantom damages. Maintaining the 2021-2023 reforms is crucial for insurance availability and affordability in Florida.
Other measures that could contribute to stability in the homeowners’ insurance market include:
- Maintaining tort reforms
- Enhancing transparency surrounding home flooding history
- Improving transparency in insurance rate calculation
The Florida Senate Banking and Insurance Committee proposed SB 888, which aims to enhance the rate comparison website maintained by the Florida Office of Insurance Regulation. This could provide consumers with more information about insurance products and their costs, potentially increasing confidence in the market’s competitiveness and fairness.
Conclusion
Florida’s experience shows that well-crafted tort reform can lead to a more stable insurance market. Continuing consumer-friendly policies like tort reform and enhancing transparency can benefit both insurance buyers and providers. As Florida moves forward, maintaining these reforms will be crucial in preventing a return to the previously unstable insurance environment.
