Florida's Insurance Crisis: A Comprehensive Reform Proposal to Restore Market Stability

Florida Gov. Ron DeSantis's proposed insurance fraud and legal system abuse reforms, announced this week for consideration during the legislative session that begins in March, would build on measures approved in the closing weeks of 2022 and go a long way toward fixing the state's insurance crisis.

Eliminating One-Way Attorney Fees and Assignment of Benefits

Legislation passed during the 2022 special session eliminated one-way attorney fees and assignment of benefits (AOB) arrangements for property insurance claims. Gov. DeSantis's proposal would go further, eliminating these mechanisms and 'attorney fee multipliers' for all lines of insurance.

Addressing the Root Causes of the Crisis

Florida's insurance crisis didn't happen overnight, and it will take years for the impacts of fraud and legal system abuse to be wrung out of the system. Policyholders won't see premium benefits any time soon. Job 1 is to 'stop the bleeding' as insurers fail, leave the state, or stop writing critical personal lines coverages like auto and homeowners.

According to the state's Office of Insurance Regulation, Florida accounts for nearly 80 percent of the nation's homeowners' insurance lawsuits, but only 9 percent of claims. This data highlights the disproportionate impact of insurance fraud and legal abuse in the state.

To address this issue, it is crucial for Florida to continue its efforts in reforming its insurance and legal systems. Policyholders should stay informed about these reforms and consider reviewing their insurance policies to ensure they are adequately covered. Additionally, they should be cautious when signing AOB agreements and seek legal advice if necessary.