One of the main objectives of the newly elected Governor, and many legislators, is to re-visit a property insurance bill that was vetoed by Governor Crist last year. The vetoed bill was supported by the insurance industry, but Governor Crist vetoed the bill and called it “anti-consumer” and stated that it was wrong to allow the insurance companies to raise insurance rates during these very tough economic times.
Newly elected Florida legislators are intent on re-visiting this issue as soon as possible. Indeed, an ambitious re-write of the bill that was vetoed by Governor Crist will get its first public hearing this week as many lawmakers grapple with again trying to reduce costs for the industry.
This new bill (SB 408), sponsored by Sen. Garrett Richter, R-Naples, will make it harder for public adjusters to re-open old claims to holdbacks of payouts pending proof of repairs.
Among other provisions found in the bill include the following:
• Allowing insurance companies to hold back a portion of claims payments until the policyholder shows proof that repairs and replacements are indeed taking place. Insurers have argued that Florida is one of the few states that requires insurers to pay claims up front and does not require proof that claims are not simply being pocketed.
• Reducing to three years the length of time a policyholder can re-file a claim, down from the five year window now on the books.
• Shifting the burden of proof in contested sinkhole cases from an insurance company burden to prove damage wasn’t caused by a sinkhole to a policyholder burden to prove it was. It also would require sinkhole work to be under contract before full payment is made.
• Placing restrictions on public adjuster advertising and capping commissions public adjusters can take on re-opened claims.
• Allowing an insurer to cancel a policy within 45 days if state regulators determine the cancellation serves the public or policyholder’s interest.
This legislation would be a major win for insurance companies and a major slap in the face for homeowners. As our Miami insurance dispute attorneys have reported, property insurance companies are already pushing double-digit increases past regulators, despite no major storm damage in the last five years and plummeting property values. Still, companies are claiming rates are not high enough to match risk and pay claims.
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