The bill, known as House Bill 837, was passed in the Senate by a 23-15 vote on Thursday.
The reforms modify Florida’s bad faith framework by clarifying that negligence alone does not prove bad faith and requiring claimants to act in good faith while submitting information and attempting to settle insurance claims. The legislation also allows insurers to limit their bad faith liability when multiple claimants are involved in a single action by paying the total policy amount before negotiations for a settlement start. In addition, it eliminates one-way attorney’s fees and fee multipliers.
In a tweet, Governor DeSantis explained that the changes were necessary to “protect Floridians and our economy from predatory lawsuits” and that Florida has long been a “judicial hellhole.” Insurance industry players have praised the reforms, stating that they will help address Florida’s insurance affordability problems.
US P&C insurance sector in Florida ripe for reform
The American Property Casualty Insurance Association (APCIA) stated that the reforms would restore fairness to Florida’s legal system, reduce the number of frivolous lawsuits, and ultimately benefit consumers by making insurance more accessible and affordable. Neil Alldredge, president and CEO of the National Association of Mutual Insurance Companies (NAMIC), added that the reforms would bring “much-needed stability” to achieve a healthy and competitive insurance marketplace.
Additionally, Louisiana’s insurance commissioner, Jim Donelon, discussed the possibility of implementing similar reforms in the state and expressed his support for a proposal targeting insurance lawsuit abuse, according to a report by the Louisiana Illuminator.
Flood insurance essential, especially in the wake of Hurricane Ian
In Florida, hurricane insurance is a vital component of many homeowners’ insurance policies. Given the state’s location and history of hurricane activity, insurance providers in Florida offer policies that include coverage for damages caused by hurricanes, such as wind damage, storm surge, and flooding.
Florida law requires insurance companies to offer hurricane coverage, although it is not required by law for homeowners to have such coverage. However, many mortgage lenders require it as part of their loan agreement, as it protects their investment in the property.
The cost of hurricane insurance in Florida can vary depending on the location and age of the home, the amount of coverage required, and other factors. Some insurance providers offer discounts for homeowners who take measures to strengthen their homes against hurricane damage, such as installing hurricane shutters or reinforcing the roof.
It is essential for homeowners in Florida to review their insurance policies and understand their coverage, deductibles, and exclusions. Homeowners should also be aware of any additional endorsements or riders that may be available to add coverage for specific items or events, such as flood insurance.
In the event of a hurricane, homeowners should document any damage and contact their insurance provider as soon as possible to file a claim. It is also important to take steps to protect the property from further damage, such as covering broken windows or making temporary repairs.
Could parametric insurance offerings solve Florida’s flood insurance issues?
According to Mark Hara, North America CEO of FloodFlash, a parametric insurance company based in the UK, the US property market’s recent catastrophic flood losses have given parametric insurance a more compelling value proposition for brokers and their clients.
FloodFlash, which is based in the UK, opened its US operations earlier this year, and began by launching commercial property in Florida, Virginia, Texas, Louisiana, and California. The insurtech aims to expand into 48 continental US states.
Hara told press: “The things that led to the Florida insurance market’s collapse make parametric insurance an even more powerful value proposition because there isn’t a protracted claims process [with parametric]. The timing couldn’t have been better to bring a new product.”
FloodFlash, which has claimed to be the first insurance provider to pay catastrophic flood claims as quickly as four hours, uses computer models, cloud software, and connected technology to power its parametric products.
