Toward the end of the 2021 Florida legislative session, the Florida Senate passed Senate Bill 76, a bill that focuses on reducing litigation related to property insurance claims and also places restrictions on companies soliciting insureds to file roof claims.
At the heart of SB 76 is the implementation of a presuit requirement that any claimant (who is not an assignee of the policy) must provide written notice of intent to initiate litigation to the insurer at least 10 business days before filing suit under the policy. The notice of intent requires the claimant to state the alleged acts or omissions of the insurer. In addition, if the claim regards a denial of coverage by the insurer, then the claimant must provide an estimate of the damages, if known. If the alleged acts or omissions of the insurer are not a denial of coverage, then the claimant must provide a presuit demand. The presuit demand must itemize the damages, attorneys’ fees and costs, as well as the disputed amount.
SB 76 also requires insurers to have a procedure in place to promptly investigate, review, and evaluate the notices of intent. The legislation requires an insurer to respond within 10 business days after receiving the notice. If the notice of intent alleges a denial of coverage, the insurer must respond by either accepting coverage, continuing to deny coverage, or asserting its right to re-inspect the property. If the insurer chooses the latter, it must re-inspect the property within 14 business days and then indicate whether it will continue to deny coverage or accept coverage. For claims where the dispute is not a denial of coverage, SB 76 requires the insurer to make a settlement offer or require the claimant to participate in alternative dispute resolution. If alternative dispute resolution is not concluded within 90 days after the expiration of the 10-day notice of intent, the claimant may file suit without further notice to the insurer.
The presuit process introduced in SB 76 is not optional for claimants. Under the legislation, a court must dismiss without prejudice any suit where there was no notice of intent provided to the insurer, or if the presuit period did not properly conclude.
Along with the new presuit process for residential and commercial property claims, the Florida Senate also implemented reforms to the statutory award of attorneys’ fees in such lawsuits. Previously, if a claimant only recovered a small proportion of which it sought, the claimant would still recover all its reasonable attorneys’ fees and costs. Under the new legislation, the amount recovered by the claimant will determine the amount of attorneys’ fees and costs the claimant could recover from the insurer. The changes only impact lawsuits where the claimant is not an assignee of the policy.
The changes to the award of statutory attorneys’ fees and costs are as follows: If the difference between the amount recovered by the claimant and the presuit settlement offer is less than 20% of the disputed amount, then the claimant is not entitled to recover any attorneys’ fees and costs, as each party would be responsible for its own fees and costs. If recovery is greater than 20% but less than 50% of the disputed amount, the insurer would pay the claimant’s attorneys’ fees and costs equal to the percentage of the disputed amount obtained. In cases where the claimant recovers more than 50% of the disputed amount, the insurer would have to pay all the claimant’s attorneys’ fees and costs.
In addition to the reforms mentioned above, SB 76 addresses several issues related specifically to roof claims. Notably, the legislation prohibits advertisements by contractors that encourage, instruct, or induce a consumer to contact a contractor or public adjuster to make an insurance claim for roof damage. SB 76 also prohibits soliciting by contractors, including both in-person and electronic solicitation (phone, email, text, etc.). Further, the legislation prohibits contractors from offering residential property owners inducements (gift cards, cash, rebates, coupons) in exchange for allowing the contractor to inspect the roof or to file a roof claim with the property owner’s insurer.
Furthermore, SB 76 prohibits a contractor from interpreting a property owner’s insurance policy or from advising a property owner as to coverage under the insurance policy. An exception to these prohibitions in the legislation exists in situations where the contractor is also a licensed public adjuster. Lastly, SB 76 prohibits contractors from performing repairs for an insured property owner without first providing the property owner with a detailed cost estimate. The legislation provides that any roof contractor (either directly or through its employees and agents) may be fined up to $10,000 for any violation.
It is expected that Florida Gov. Ron DeSantis will sign SB 76 into law, which would go into effect on July 1, 2021.