Skip to Content

Recent Changes in Florida’s Property Insurance Law for Admitted and Surplus Lines Insurers: The Basics of What You Need to Know

May 4, 2021

Hours before the close of Florida’s 2021 annual legislative session, the Florida Legislature passed SB 76, legislating wide changes to the handling and litigation of property insurance claims.  The bill affects both admitted insurers and surplus lines insurers.  The bill would take effect July 1, 2021, pending approval by the governor. 

Solicitation for roof claims 

SB 76 creates Florida Statute § 489.147 prohibiting certain types of solicitations and the offering of something of value in exchange for a roof inspection or making a roof claim.  Specifically, the new statute prohibits a contractor from using prohibited written or electronic advertisement that “encourages, instructs, or induces a consumer” to contact that contractor or public adjuster for purpose of making a claim for roof damage.  A prohibited advertisement includes items such as door hangers, business cards, magnets, flyers, pamphlets, and emails.  The new statute applies to both compensated employees of the contractor and to nonemployees “compensated for soliciting, the actions of whom are considered to be actions of the contractor.  Additionally, unless the contractor is also a licensed public adjuster, the contractor cannot interpret an insurance policy or advise insureds of duties under an insurance policy. 

When entering into a repair agreement with an insured, the contractor must also provide a “good faith estimate of the itemized and detailed cost of the services and materials” contemplated by the repair contract.  Further, the contract must contain a notice that the contractor cannot engage in the solicitation restrictions imposed by the statute.  If the contract does not contain such a notice, the insured may void the contract within 10 days after executing it. 

Florida Statute § 489.147 also prohibits certain types of financial incentives in relation to roof claimsA contractor cannot provide anything of value, such as a rebate, gift card, coupon, or deductible waiver, to a residential property owner in exchange for permitting a contractor to inspect the roof or for making an insurance claim for damage to the owner’s roof.  Finally, the new statute prohibits referral fees or rewards for the referral of any services payable by property insurance proceeds.  

The bill creates a new subsection, subsection 20, of Florida Statute § 626.854 applying to public insurance adjusters.  A public insurance adjuster cannot provide anything of value, such as a rebate, gift card, coupon, or deductible waiver, to a residential property owner in exchange for permitting a public adjuster or a public adjuster apprentice to inspect the roof or for making an insurance claim for damage to the owner’s roof.  The new statute similarly prohibits the public adjuster from receiving referral fees or rewards for the referral of any roof repair/replacement services payable by property insurance proceeds.  

Deadlines for Submitting Property Insurance Claims 

SB 76 expands Florida Statute § 627.70132, the claim notice statute, to expand the statute from only hurricane claims to apply to all property insurance claims.  In addition, the bill expands the statute to apply to surplus lines insurers.   

A claimant must provide notice of a claim or a “reopened claim” within two (2) years of the date of loss.  A “supplemental claim” is barred unless notice of the supplemental claim is provided within three (3) years of the date of loss.  A “reopened claim” is a claim that was previously closed but reopened for additional costs for loss or damage previously disclosed.  A “supplemental claim” is a claim for additional loss or damage from the same peril previously adjusted or for costs incurred while completing repairs. 

This change does not impact the five year statute of limitations for filing a lawsuit under Florida Statute § 95.11.   

Mandatory Pre-Suit Notice 

SB 76 creates Florida Statute § 627.70152 applying to lawsuits arising under property insurance policies, except for lawsuits from an assignee of benefits.  This new statute applies to both admitted and surplus lines insurers. 

As a precondition to filing a lawsuit, a claimant must now provide a notice of intent to litigate at least ten (10) business days prior to filing a lawsuit, but not before a coverage determination under Florida Statute § 627.70131, commonly referred to as the “90 day” statuteThe notice must be on a form provided by the Department of Financial Services, and the notice must be furnished to the insurer through the email address on file with the Department of Financial Services. 

The mandatory pre-suit notice must contain, with specificity, the alleged act(s) or omission(s) giving rise to the lawsuit, an estimate of damages, if known, and, for claims other than denied claims, an itemization of damages, attorney’s fees and costs, as well as the disputed amount.  Supporting documentation may be provided with the notice. 

The insurer must have a procedure for analysis/investigation of the notice.  An insurer must respond in writing within 10 business days of the notice by accepting coverage, continuing to deny coverage, or asserting the right to re-inspect the premises.  Any re-inspection must be completed within fourteen (14) business days after the insurer’s invoking of its right to re-inspect the premises.  Following the re-inspection, the insurer can accept coverage or continue to deny coverage, as appropriate. 

Unless the claim is denied, the insurer must respond by making a settlement offer or requiring alternative dispute resolution.  Alternative dispute resolution must be completed within ninety (90) days.  If not completed within that timeframe, the claimant may immediately file suit without providing additional notice to the insurer. 

If the claimant does not comply with the mandatory pre-suit notice, the new statute requires a court to dismiss the lawsuit without prejudice. 

This new notice requirement extends the five-year statute of limitations period under Florida Statute § 95.11 by the same amounts of time If the statute of limitations time limits expire in thirty (30) days after conclusion of pre-suit process, the time limits are tolled for thirty (30) days.  

Consolidation of Multiple Lawsuits 

SB 76 creates Florida Statute § 627.70153 requiring parties to provide notice to the courts of ongoing, multiple actions involving the same property insurance policy for the same owner(s).  Under this new statute, notice is required for multiple lawsuits by claimant(s) for lawsuits brought by the same claimant for multiple claims under the same property insurance policy, as well as for any lawsuits brought by assignees of insurance benefits.  The court in the earliest lawsuit may consolidate all the lawsuits. 

The new Florida Statute § 627.70153 allows a lawsuit filed in county court to be consolidated into a lawsuit in circuit court, if the circuit court jurisdiction is triggered by the total amount in controversy of all consolidated lawsuits. 

Attorneys Fees and Costs in Property Insurance Lawsuits 

SB 76 changes Florida Statutes §§ 626.9373 (applying to surplus lines insurers) and 627.428 (applying to admitted insurers) to indicate that, for lawsuits arising from residential or commercial property insurance policies (not brought by an assignee of insurance benefits), the amount of fees and costs can only be awarded only as provided in Florida Statutes §§ 57.105 or 627.70152. 

Under Florida Statute § 627.70152, SB 76 establishes a three-part framework to determine any entitlement to attorneys fees and costs in a lawsuit arising from a residential or commercial property policy.  The framework analysis uses the “amount obtained” by the claimant, which is defined in the statute as “the damages recovered, if any, but . . .  does not include any amount awarded for attorney fees, costs, or interest.” 

Under the first framework, each party pays its own fees and costs if the difference between the amount obtained by the claimant and the presuit settlement offer (excluding attorney fees and costs) is less than twenty percent (20%) of the disputed amount. 

Under the second framework, if the difference between the amount obtained by the claimant and the presuit settlement offer (excluding attorney’s fees and costs) is greater than twenty percent (20%) but less than fifty percent (50%) of the disputed amount, the insurer pays the claimant’s fees and costs equal to the percentage of the disputed amount obtained times the total attorney’s fees and costs. 

Under the third framework, the insurer pays the full amount of the claimant’s attorneys fees and costs if the difference between the amount obtained by the claimant and the presuit settlement offer (excluding attorney fees and costs) is greater than fifty percent (50%) of the disputed amount. 

The significance of these changes is being evaluated and will be the subject of future articles and blogs.  In the interim, if you have questions concerning these changes to Florida’s property insurance law, please contact Sarah Burke, J. Pablo Cáceres, William Collum, Timothy Engelbrecht, John Garaffa, Brian Hohman, Hudson Jones, Tracy Jurgus, Thomas Keller, Matthew Lavisky, William (Bill) Lewis, David Maldoff, Kathy Maus, Michael Montgomery, Julius “Rick” Parker III, Christopher Ramey, Anthony Russo, Troy Seibert, Jason Seitz, or L. Andrew Watson.