Plus, more property rate hikes & reinsurance hardening
The rush of lawsuits filed in Florida courts to beat the effective date of the new tort reform law has one South Florida court considering staying all new cases, two more Florida property insurance companies seek double-digit rate increases as reinsurance rates remain high and coverage limited, plus the new dates for the next insurance villages in Ian-ravaged Southwest Florida. It’s all in this week’s Property Insurance News.
Lawsuit Avalanche: As we previously reported, the trial bar’s reaction to Florida’s new tort reform law (HB 837) has been to file a massive number of lawsuits statewide to beat the law’s March 24, 2023 effective date. At stake: one-way attorney fees under the old law. Now Broward Circuit Chief Judge Jack Tuter is quoted in the Daily Business Review as considering “drastic measures” to deal with this litigation glut. “A drastic measure could be that I could potentially stay the prosecution of all the newly filed cases for a period of time; whatever that period of time is, I’m uncertain,” he said. Judges in Broward’s circuit and county civil divisions have seen their caseload increase from 150 cases to more than 700 cases per judge. In Miami-Dade County, the count has grown from 400 cases to more than 1,300 per judge, representing a 301% increase in new cases over last year. Judge Tuter is holding an in-court hearing today (April 10) from 11:45am-1:30pm, accessible online for interested parties to weigh-in.
The Miami-Dade Clerk of Courts has added 680 hours of overtime to its budget to process this lawsuit avalanche. Florida Bar News reports the statewide E-filing Portal shattered nearly every record in its book last month. New cases in March totaled 280,122 statewide, nearly 127% higher than the previous record in May of 2021. Speaking of the tort reform, here’s a helpful chart of the before & after changes from HB 837, courtesy of the Lopes Wizel law firm.
Rate Increases: Another week brought another set of public rate hearings before the Florida Office of Insurance Regulation. American Strategic Insurance and ASI Preferred Insurance submitted a use-and-file rate increase of 19.3% for its homeowners and 19.8% for dwelling fire policies for 2022. Their 2023 filings request a 32.5% rate increase for homeowners and a 39.4% hike in dwelling fire policies. Cypress Property & Casualty Insurance Company submitted a use-and-file rate increase of 19.5% for its homeowners and a 15.8% increase for its property fire policies for 2022. It follows the company’s January 2022 filing for a 26.3 % increase in homeowners policies.
Reinsurance Woes: Global reinsurer Gallagher Re reports that the April 1 reinsurance renewal saw a continuation of the January trend of rising rates and limited capacity. Insurance companies rely on reinsurance to ensure adequate funds to pay catastrophe claims. “We certainly didn’t see any meaningful new capacity or any other indication that reinsurers are prepared to cede their hard-won pricing territory any time soon,” said James Kent, CEO of Gallagher Re.
The human cry among all parties – policyholders, companies, regulators, and legislators – is that Florida property insurance rates have to come down. There’s only three things that impact rates: weather, litigation, and reinsurance costs. We’ve discussed the need in these pages for the legislature and governor to provide a “reinsurance bridge” on a temporary basis to help insurance companies until the worldwide reinsurance market softens. Yet, not a mention of reinsurance in the legislature this week.
Insurance Villages: The insurance villages return to Southwest Florida next week to help victims of last September’s Hurricane Ian file or otherwise get help with their insurance claims in-person with insurance company representatives. The villages will be held on April 17 in Punta Gorda, April 18 in Ft. Myers, and April 19 back in Punta Gorda. Click here for more details.
LMA Newsletter of 4-10-23
