Plus, the field adjusters’ hubbub
The deluge of lawsuits filed just before the elimination of one-way attorney fees is predicted to be a new threat to Florida’s property insurance market, how to put the field adjusters’ reports controversy into perspective, plus the ever-growing increase in automobile insurance rates. It’s all in this week’s Property Insurance News.
Lawsuit Deluge: Among its many tort reforms, HB 837 eliminated one-way attorney fees in most insurance lines, including property insurance. It became effective on March 24. The trial bar, led by the billboard lawyers filed a record 280,122 lawsuits in Florida courts between March 1 and March 23 in order to beat the reform. The Insurance Information Institute said this is going to “create a historic backlog…where insurers shell out billions of dollars in legal fees for the foreseeable future.” Triple-I predicts this will further threaten Florida’s weakened insurance companies “and make it even harder for the market to stabilize, which was the intent of the reforms in the first place,” in a market that Artemis notes “currently still sees as many as 24 insurers facing the risk of insolvency.”
In Broward County’s circuit and county civil divisions, caseloads have increased from 150 cases to more than 700 cases per judge. Circuit Chief Judge Jack Tuter had considered temporarily staying the prosecution of those cases. But in an April 10 meeting with stakeholders, he instead assured the audience that cases will be resolved without major disruption, the Florida Bar News reports. “There is nothing cataclysmic that is going to come,” he said.
Claim Adjusters Reports: You’ve certainly seen the stories in the news about the three field claim adjusters who’ve made questionable accusations against unnamed Florida insurance companies. They say the companies nefariously changed their field adjuster reports, eliminating items and lowering the estimated claims’ payouts.
I am just so puzzled about why these field adjusters believe that estimates aren’t supposed to change for continual improvement based on the policyholder’s coverage. Even more comical, as 1099 contractors, they believe their consent for changes is required. As an analogy, I asked a television reporter if she asks permission before she edits the content of the contract journalist or photographer she added as “extra help” on a story. The answer was “no.” Out of the more than 710,000 Hurricane Ian claims, I believe the aggregate number of those having claims troubles is infinitesimal in comparison. And the less than 20 claims of these adjusters that are the recent focus? The facts are the same …the overwhelming majority of claims aren’t troubled! I oversaw the DFS consumer helpline in the early 1990’s and it is known for successfully opening up communication between consumers and companies. It’s so much more effective than battling issues in the press.
High Auto Rates: Florida’s market woes also extend to automobile insurance. We are one of the most-expensive states for auto insurance, with premiums soaking up a large portion of household expenses for hard hit drivers, according to the latest Insurance Research Council research brief. The average Florida driver spent over $1,342 in annual auto premiums in 2020 — more than 30% more than the national average. 2023 quoted rates are up 15%, the largest increase in the country. “Florida faces many of the cost drivers impacting the country as a whole: increasing auto claim severity, growing medical utilization, economic inflation boosting the costs of repairing and replacing vehicles, and litigation,” IRC says. “However, unique features in Florida’s insurance system and a long-standing culture of claim and legal system abuse have allowed some medical and legal professionals to generate substantial income for themselves at a significant cost to Florida drivers.”
LMA Newsletter of 5-1-23