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Recent Developments in Florida Property Insurance Law

April 7, 2016

The 2016 regular session of the Florida Legislature concluded on Friday, March 11, 2016. Although the assignment of benefits and appraisal were the targets of scrutiny in the 2016 regular session, only one bill passed.

The Legislature passed Senate Bill 1274 which impacts Florida property insurance coverage. The provisions of the bill become law on July 1, 2016. Senate Bill 1274 was signed by Governor Scott on April 6, 2016. This bill contains minor changes in, and additions to, Florida’s property insurance laws that will impact the underwriting, adjustment, and litigation of insurance claims. Below are a few of the significant changes contained in Senate Bill 1274:

The bill creates Florida Statute s. 627.7151 that allows authorized carriers to offer “limited sinkhole coverage” policies. It is only applicable to personal lines residential coverage (not commercial lines residential or commercial lines nonresidential). Limited sinkhole coverage (if offered):

  • must provide coverage sinkhole loss (as defined by 627.706(j)) but does not have to include contents or ALE.
  • may be limited to the repairs recommended by the insurers’ engineer (pursuant to 627.707(2)).
  • may include deductibles “agreed to by the insured and insurer.”
  • cannot have policy limits below $50,000 (unless that amount exceeds the replacement cost of the property).
  • must contain a cautionary statement if a deductible different than s. 627.706(1)(b) is offered.

The form utilized by the insurer for limited sinkhole coverage does not have to be approved by the Florida Office of Insurance Regulation. However, when obtaining this coverage, the policyholder is required to sign a form acknowledging that the policy is a “repair-only” policy.

Our firm’s first-party property coverage department will be pleased to speak with you now or in the future should you face questions regarding the changes to the statutes, how they may impact individual claims, or recent decisions interpreting insurance policies. Please feel free to call upon Lee CraigDoug BerryBill LewisScott FrankPablo CáceresTom KellerJohn GaraffaDavid MaldoffRick Parker (Tallahassee), Janice BuchmanCurt AllenChristopher RameyTroy SeibertTimothy Engelbrecht, or Tracy Jurgus (Miami) at any time as questions arise.