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William Large

Governor signs property insurance reform bill that would end one-way attorney fees

By Michael Carroll
Dec 16, 2022

Gov. Ron DeSantis on Friday signed a bill that tort-reform supporters say is a landmark measure to shore up the state’s property insurance market, ban the heavily criticized one-way attorney-fee provision and eliminate the assignment of benefits (AOB) in property claims.

Senate Bill 2A passed the Florida Senate on a vote of 27-13, and the state House of Representatives approved the measure 84-33. The Legislature’s action occurred during a special legislative session on property insurance reform in which tort-reform supporters and insurance industry insiders called on lawmakers to pass robust reforms.

“This is a pro-consumer bill that should drive down litigation abuse and put the property insurance market on a path to stability,” Michael Carlson, president and CEO of the Personal Insurance Federation of Florida (PIFF), said in a statement emailed to the Florida Record. “The Legislature is right to focus on lawsuits, and Senate Bill 2A includes bold provisions, including the prohibition of the one-way attorney fee, to fully address the property insurance litigation environment in Florida.”

The Florida Justice Reform Institute also applauded the lawmakers’ action.

“SB 2A includes substantial reforms that remove the incentive to file lawsuits over questionable claims,” William Large, president of the Florida Justice Reform Institute, said in a statement emailed to the Record. “The Florida Justice Reform Institute commends Gov. DeSantis and the Florida Legislature for working together on common-sense solutions that will hold all parties accountable and deliver real results."

According to PIFF, Florida laws have been exploited to the extent that litigation costs are driving property insurers to exit the Florida market, even without major storms striking the state. Data from the Florida Office of Insurance Regulation shows that last year, Florida represented 7% of U.S. property claims but more than three-quarters of litigated property insurance claims.

SB 2A bans AOB within the property insurance system. Critics have said the assignment of homeowner policy benefits to unscrupulous third-party contractors have led to inflated roof repair bill submissions statewide.

The reform bill would also end what PIFF says is the heavily abused one-way attorney-fee law.

“Florida’s unique one-way attorney-fee statute is intended to shield policyholders against legal bills if they need to sue their insurers,” PIFF said in a statement. “However, unscrupulous attorneys and contractors exploit the law to file unnecessary lawsuits against insurers.”

In addition, SB 2A tightens the process for filing bad-faith claims against insurers, shortens the initial claims filing period from two years to one and allows for alternative measures to resolve claims disputes, including arbitration.