With over 900 items on the Florida legislative docket and only 60 days to consider them, it’s not surprising that many bills simply die in committee or are never seriously considered. Add to that a tragic event right in the middle of the session and what you get are shifted priorities. What was important becomes now relegated by something new.
The shooting that happened on Feb. 14, 2018 at Marjory Stoneman Douglas High School in Parkland, Fla., that left 17 people dead led to an uprising of popular support for changes to gun laws in Florida and created this shift in priorities for the Florida Legislature.
Suddenly, the problems in the Florida insurance market became much less important than other issues.
In light of that, several insurance-related bills didn’t make it this year, though they also faced stiff opposition.
Assignment of Benefits
For a sixth straight year, the Florida legislature failed to consider reform for assignment of benefits (AOB) abuses associated with water loss claims (not related to weather events).
An AOB allows a contractor to get paid for repair work, in this case water or roof damage, directly by the insurer rather than them paying the costumer. However, contractors have been making repairs beyond what the insurer would normally agree to pay and then suing when the insurer denies or disputes the claim.
This year’s bill, SB 62, was sponsored by Sen. Dorothy Hukill and had the support of both the Florida Property & Casualty Association and the Florida Office of Insurance Regulation. It created several requirements for an AOB agreement to be considered valid by an insurer, including a provision that allows named insureds to rescind the agreement within seven business days of signing it and a provision requiring the assignee (contractor) to provide a copy of the agreement to the insurer within three business days of executing the agreement. It also made several fee provisions of assignment agreements unenforceable, including a penalty or fee for rescinding the agreement, administration fees and check or mortgage processing fees.
Another AOB bill, SB 1168, sponsored by Sen. Greg Steube, included several of the provisions as SB 62, but it went farther than SB 62 in stating that insurers may not restrict the assignment of post-loss benefits; may not require that a particular vendor make repairs; or may not recommend or suggest a particular vendor for repairs unless requested by an insured. The industry opposed this bill.
What Does This Really Mean?
It means that for another year, Florida insurance consumers will be asked to absorb the rising costs of these claims.
“Without a legislative remedy, this problem will lead to an increase in homeowners insurance premiums and lack of consumer choice as insurers stop writing or renewing policies in areas with high water losses,” said Florida Insurance Commissioner David Altmaier.
Two bills related to windshields were introduced this year – SB 396 and HB 811 – both written to address different problems with coverage for damage to windshields, a form of AOB abuse that the industry has dubbed “auto glass.”
Florida law requires that auto policies provide comprehensive coverage without a deductible.
HB 811, sponsored by Rep. Rene Palsencia, would have allowed insurers to require an inspection of the windshield before authorizing repair or replacement. SB 386, sponsored by Sen. Rene Garcia, was originally filed for a similar purpose, but after several amendments in committee, it was rewritten to address incentivizing customers to file fraudulent auto glass claims.
Both of these bills were designed to reign in auto glass claims fraud and lawsuits that have been rising at an alarming rate. According to the Florida Department of Financial Services, in 2006, approximately 400 auto glass AOB lawsuits were filed against auto insurers. In 2016, nearly 20,000 lawsuits were filed.
SB 150, introduced to the Senate by Sen. Tom Lee, would have repealed the Florida No-Fault Law. Currently, vehicle owners are required to maintain personal injury protection (PIP) coverage, but not liability for bodily injury.
This bill would have changed that requirement so that owners would have to maintain coverage for bodily injury and property damage, removing the requirement to maintain personal injury protection and replacing it with a requirement to maintain medical payments coverage.
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