Halloween is upon us, and kids statewide look forward to having fun with ghosts and goblins.
Unfortunately, many adults and homeowners are playing their own game of trick or treat these days. It looks more like this: pay massive premium increases on your homeowner’s insurance policy, or lose it altogether.
Florida’s insurance marketplace was already showing significant cracks. In the past year, the number of homeowners that have been driven to Citizens Property Insurance, the state’s insurer of last resort, has grown exponentially.
This has created obstacles for the real estate industry, and because Citizens is backed by the taxpayers of the state of Florida, it presents every person in this state with a potential for financial impact.
That was before Hurricane Ian ripped through the west coast and added another $50 billion in estimated damages that must be absorbed by the insurance and reinsurance sectors. Ultimately, those damages will find their way into higher premiums paid by policyholders whether they are with Citizens or not.
Something must be done, and everyone knows it.
I was not surprised to see property insurance pop up as a heated topic in last week’s gubernatorial debate between Gov. Ron DeSantis and former Gov. Charlie Crist. It was ironic in some ways because it was Crist’s terrible insurance bill of 2007 when he was governor, that has led to many of the issues we have today.
While we cannot fix all of what happened in 2007, there are some things we can do now to deal with our insurance crisis and lay the foundation for a stronger system with more availability and more reasonable prices.
In the debate, DeSantis rightly pointed out that one of the major cost drivers for Florida’s policyholders is exorbitant attorney fees.
In Florida, according to state statutes, we have a system of one-way attorney fees. It was originally designed in concept to protect consumers and policyholders. The measure puts insurance companies on the hook for any attorney fees incurred by policyholders who may litigate against their carrier.
The concept sounds great, but unfortunately, the statute is being abused significantly.
Now, many times, enterprising attorneys are seeking plaintiffs, promising them free services, and then receiving approval to litigate, often before an insurer can even get through a basic due-diligence process to determine a claim’s validity.
To cut losses, an insurer will move quickly to settle, paying a small sum on the claim to the policyholder but then still being liable for attorney’s fees that can sometimes be significantly larger than the settlement itself. That means that policyholders get small sums while attorneys feast on the system.
The insurance policy was never designed to carry this kind of risk, which is driving the cost of insurance premiums through the roof. If this does not stop, Florida will no longer have any insurance companies that can afford to do business here, and our state will fail economically.
I hope the attorneys will understand this and agree to support legislation to fix this issue permanently. The governor has called for a special session, and he has mentioned attorney fees as an issue that needs to be addressed.
Commonsense logic like this makes me a big fan of DeSantis. Taking action on one-way attorney fees will make every policyholder in this state a big fan of his as well.
- Vern Buchanan Raises $1.4 Million for Mike Johnson in New House Speaker’s First Major Fundraising Event - November 29, 2023, 6:00 am
- Greg Steube Introduces the No Plea Deal with Terrorists Act - November 28, 2023, 8:00 pm
- Gas Prices in Florida Continued to Drop Over Thanksgiving Weekend, AAA Reports - November 28, 2023, 6:00 am
