As the 2021 Florida legislative session concluded, the Florida Senate passed Senate Bill (SB) 76. This bill created waves in the property insurance industry as it has a significant, potential impact on pre-suit claims handling and entitlement to attorney’s fees and costs during litigation. On Friday, June 11, 2021, Governor Ron DeSantis signed SB 76.
At the heart of the bill is a new notice requirement that may potentially curtail the rising number of lawsuits being filed in Florida. Before filing a lawsuit, a claimant must now provide written notice of an intent to initiate litigation, on a form provided by the Department of Financial Services, at least 10 business days before filing suit under the subject insurance policy and after the insurer has made a determination of coverage. The pre-suit demand must itemize the damages, including attorney’s fees, to allow the carrier an opportunity to evaluate the dispute. Failure to comply with this requirement allows the Court to dismiss the action without prejudice.
Upon receipt of the Notice, the insurer has the responsibility to review and evaluate the claimed dispute and respond in writing within 10 business days after receiving notice. If an insurer is responding to a notice following a denial of coverage, the insurer can either accept coverage, continue to deny coverage, or assert the right to re-inspect the property. Once the denial is confirmed, the claimant may file suit without providing additional notice to the insurer. However, if the insurer seeks to re-inspect the property, it has 14 business days after the response to accept coverage or continue to deny coverage.
In response to the 10-day Notice of Intent, the carrier has the option to potentially invoke appraisal and the insurer may make settlement offers, which now has an impact on fee entitlement under Florida Statutes Section 627.428. The new bill introduces three possibilities with respect to fee entitlement: (1) Each party pays its own attorney’s fees; (2) Insurer pays a portion of the attorney’s fees; (3) Insurer pays all attorney’s fees.
1. If the difference between the amount obtained by the claimant and the pre-suit settlement offer, excluding reasonable attorney fees and costs, is less than 20% of the disputed amount, each party pays its own attorney fees and costs and a claimant may not be awarded attorney fees under 626.9373(1) or s. 627.428(1).
2. If the difference between the amount obtained by the claimant and the pre-suit settlement offer, excluded reasonable attorney fees and costs, is at least 20% but less than 50% of the disputed amount, the insurer pays the claimant’s attorney fees and costs under 626.9373(1) or s. 627.428(1) equal to the percentage of the disputed amount obtained times the total attorney fees and costs.
3. If the difference between the amount obtained by the claimant and the pre-suit settlement offer, excluding reasonable attorney fees and costs, is at least 50% other disputed amount, the insurer pays the claimant’s full attorney fees
Additionally, a claim, or reopened claim under a property insurance policy must be reported to the insurer within 2 years after the date of loss. A supplemental claim, meanwhile, is barred unless notice was given to the insurer in accordance with the terms of the policy, within 3 years after the date loss.
Finally, the reform also addresses issues specifically relating to roof claims and the ongoing problem of solicitation by general contractors and roofers. The bill prohibits advertisements by contractors that encourage, instruct, or induce a consumer to contact a contractor or public adjuster to make an insurance claim for roof damage. Moreover, the bill also prohibits soliciting by contractors, including both in-person and electronic solicitation (phone, email, text, etc.). Further, the legislation prohibits contractors from offering residential property owners inducements (gift cards, cash, rebates, coupons) in exchange for allowing the contractor to inspect the roof or to file a roof claim with the property owner’s insurer.
This law will go into effect on July 1, 2021.
Seminar – CSK will be providing a comprehensive Seminar in the near future to fully analyze these legislative changes to Florida bad faith law. In the interim, this summary of the important aspects of this legislation is provided.
To view Senate Bill 76 in its entirety, visit:
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