Despite past reforms
Credit: Vladislav Chorniy
In another ominous sign that the consumer insurance protections in last year’s SB 76 aren’t enough, insurance litigation is back on the rise in a big way. CaseGlide reports that the 17 largest property & casualty insurance carriers in Florida saw a 37% increase in new litigation filed in January, amounting to nearly 4, 600 lawsuits. The increase follows a fairly steady decline in lawsuits CaseGlide saw since July’s high of 6,633 litigated claims when SB 76 took effect. But like a game of whack-a-mole, you can’t keep a good scammer – or their lawyer – down for long.
For the second month in a row, Assignment of Benefits (AOB) lawsuits make up more than 30% of new litigation and have been on the rise steadily from the low 17% to 20% figures that were registered in the first six months of 2021, says CaseGlide. One of the provisions of SB 76 requires plaintiff attorneys provide a 10-day presuit notice to the insurance company before filing suit. The idea behind it – for lawmakers and insurance companies – was to provide an opportunity to amicably settle the claim and avoid a costly lawsuit. If those pre-suit notices are included in the count, “insurers may unfortunately still have a similar total exposure to what they had in 2020 when the Legislature first started considering SB 76,” CaseGlide CEO Wesley Todd told the Insurance Journal.
Beyond CaseGlide, here’s the bigger picture. In 2021, 76,526 property insurance lawsuits were filed in Florida, an 18% increase from the 64,843 in 2020. Claims with lawsuits cost almost five times more than those without. According to the Florida Office of Insurance Regulation, the average non-litigated claim is $11,000 compared to $54,000 for those with lawsuits. Yet only about 8% of the average litigated claim dollar reaches homeowners who file claims. Most of the rest of the money goes to the lawyers. And the real damning evidence of our out-of-control litigation problem: NAIC data from our Insurance Commissioner David Altmaier shows that Florida has 8% of all homeowners’ claims in the U.S., yet 76% of all homeowners’ claims lawsuits.
But the cherry atop this stinkweed comes from Scott Johnson’s latest blog. “One carrier reported to me that, after the passage of SB-76, a trial lawyer offered to settle hundreds of pending suits by slashing each policyholder’s indemnity to just $1,000. This disgusting offer was not made out of concern for what each homeowner deserved or needed—rather it was a transparent attempt to get attorney fees at the expense of the client homeowner who, I’m sad to say, would’ve been none the wiser.” I, too, have heard similar stories. If you are still in doubt on the need for further insurance consumer protections in Florida, please contact me. Otherwise, please contact your legislator TODAY and insist our lawmakers take this problem seriously and enact further needed reforms.
LMA Newsletter of 2-21-22
