The Florida Legislature’s recent efforts to curtail assignments-of-benefits abuse and excessive claims litigation may be having an impact, according to a new report from a lawsuit-tracking firm.
CaseGlide, a litigation management software company that regularly reports on insurance litigation, said that new litigated claims dropped about 9% last month for Florida’s largest property insurers — the second straight month of significant decline.
The number of cases fell from 4,313 in August to 3,909 in September, the firm found. Of the 17 largest Florida insurers monitored, 13 saw a month-over-month decline in litigated claims in September. Three insurers registered between an increase between 3% and 20%, and one saw no change.
The drop follows a 35% decline in new litigated claims from July to August. The month-over-month drop was the largest percentage decline since September 2017, CaseGlide said.
The Legislature in 2019 approved an assignment-of-benefits reform law that allows insurers to place new restrictions and requirements in policies regarding AOB. Early this year, lawmakers passed Senate Bill 76, which, among other changes, requires advance notice of lawsuit filings, limits some attorney fees, and bars roofing companies from some types of direct solicitation of homeowners. That solicitation part of the law has been temporarily blocked by a lawsuit filed this year by restoration companies.
“We believe the 2021 September results are following a similar, post-legislation pattern as they did in 2019 after the Florida AOB Reform Bill took effect in July of that year,” said Wesley Todd, CEO of CaseGlide. “Like in 2019, the results this year indicated a sharp increase prior to Florida Senate Bill 76 taking effect in July, with a decline following.”
And while dropping, AOB litigation numbers remain high, CaseGlide said. AOB cases as a percentage of total new litigated cases in September were at 26%, the highest the firm has recorded since January 2020.
For 2021, the top 10 AOB contractors in the state represent 26% of all AOB-related new litigated claims, with the top contractor representing 6%, the report said.
Geographic distribution of new litigated claims continues to be dominated by the state’s southern counties, with Miami-Dade accounting for 24% of claims, followed by Broward at 18% and Palm Beach at 7%. Orange County, home of Orlando, accounted for 8% of newly litigated claims in September. These county percentages have stayed mostly consistent over the course of 2021, the firm noted.
Lawyers and insurers have said that while AOB cases have declined, some contractors have simply filed suits without benefit of an AOB agreement or have convinced policyholders to sue when claims aren’t paid.
“We’re still seeing a lot of claims lawsuits,” said Patrick Carleton, an insurance defense attorney with Groelle & Salmon, in Miami.
AOB abuse has created an additional $1 billion of inflated insurance claims in recent years, according to a recent newsletter published by Lisa Miller, a former deputy Florida insurance commissioner.
“While the reforms seem to have helped in reducing the number of AOB lawsuits, AOBs are still being used and some contractors and their lawyers have been scheming with new tactics to try to get around the reforms,” Miller wrote.
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