We are at the start of Florida’s Legislative Session for 2016. As usual, policyholders have much to be wary of when the Legislature meets. Besides losing Insurance Commissioner Kevin McCarty, (click here for a great editorial on his tenure), the industry is pursuing its usual wish list. Despite years of Florida’s Legislature passing pro-industry legislation—with no hurricanes—we continue to have the highest property insurance rates in the country. Consumers continue to be told that pro-industry legislation will lead to lower rates and a better market. Unfortunately, Florida’s consumers are paying more for policies that offer less coverage. Notwithstanding that fact, here is a partial list of one group’s legislative priorities for the upcoming session:
—Citizens Property Insurance Corporation has consistently reduced its policy count, a nod to sound, free-market reforms enacted by legislative and executive branch leadership. As such, the corresponding risk of assessments to all Florida policyholders—individuals and businesses alike— has been minimized. Unfortunately, segments of certain industries have devised schemes to contrive, or increase the price of, repair work for non-catastrophic claims. This typically involves stripping the policyholder’s benefits, which are then given, oftentimes irrevocably and in total, to a third party. Such “assignments of benefits” have created a wave of litigation unseen even during periods of natural disaster. It is critically important to be on guard for market distortions like this to ensure that the problem does not increase costs in the absence of hurricanes, or become magnified when a natural disaster strikes, creating potentially crippling economic effects. AIF SUPPORTS steps to shrink Florida’s residual market and lessen property insurance cost drivers, and will actively oppose anything that undermines the health of the private property insurance market.
—Over the years, Florida’s common law regarding how insurers’ handle claimants who seek windfall recoveries in excess of policy limits has evolved to allow lawsuit gamesmanship that pierces policy limits even when no objective “bad faith” occurs. Left uncorrected, then litigious practices threaten the availability and affordability of insurance. AIF will continue to advocate for a bill that sets clear rules as to what good faith dealings are to ensure certainty and fairness for all parties.
—AIF SUPPORTS all efforts to stamp out cost drivers and control attorneys’ fees for the benefit of premium payers statewide. Last year, legislation introduced in both chambers sought to cut down on AOB abuse. Predictably, it was met with significant opposition from those who currently profiteer on asserting policyholder benefits as their own. Working together, these vendors and attorneys conspire to inflate claims and rack up attorneys’ fees. In October, the Office of Insurance Regulation (OIR) released cost information about data call seeking, a fairly new and inventive scheme. AIF looks forward to working with stakeholders, regulators, and legislators to advocate for policyholder benefits to remain intact and for common sense regulations with regard to notifications, communications, the provision of estimates, and policyholder consent.
In case you missed the implication, apparently lawyers are responsible for the highest insurance premiums in the country. I’ll end this blog with some advice for the industry…if you want to reduce litigation costs treat the policyholder right from the beginning, so I never get the call in the first place.
Pat Benatar said it best – treat me right.
Pat Benatar said it best—Treat me Right!