Proposed Florida Insurance Law Will Reduce Fraud and Frivolous Lawsuits
The Florida legislature is thinking of tinkering with PIP and other auto insurance laws again. This time I think it will be a good change!
A version of the bill can be seen here: https://www.flsenate.gov/Session/Bill/2023/837/BillText/e1/PDF
One-way attorney fees
Florida has had a law that states that if a plaintiff sues the insurance company and wins, then the insurance company must pay the attorney fees. On the other hand, if the insurance company prevails, there are no attorney fees that must be paid. This created a situation where lawyers filed thousands of lawsuits, in the hope that one would ripen into a case in their favor. The lawyers used templates and generated these lawsuits in mass, each lawsuit acting somewhat like a lottery ticket for the attorney. It was a numbers game, the more lawsuits filed, the greater the likelihood of a payout for the attorney, with no real negative consequence for plaintiff’s attorney for filing so many suits. This resulted in some lawyers having more than 10,000 ongoing lawsuits at a time. This has substantially increased the cost of insurance in Florida making auto insurance more and more expensive. It also has substantially favored fraudsters who do not hesitate to file lawsuits on the thousands of fake cases created by their fraud rings.
Amazingly on page 30 of the PDF of the proposed law, it says: “Section 627.428, Florida Statutes, is repealed.” The entire statute is taken out!
In general, now attorney fees will be carried by each party. However, there remains the possibility of attorney fees in a declaratory judgment for coverage, found in chapter 86 of Florida statutes. It will be interesting to see how courts evolve. I believe this will substantially reduce attorney fees
Bad Faith
My experience with Bad Faith in Florida is as follows. A plaintiffs' firm churns out numerous time-limited demands, especially on cases with weird circumstances. The time limited demands usually only provide 30 days’ notice. If the demand is not paid and the insurer goes on to lose, then a?jury can end up assessing huge “bad faith” amounts. Lawyers can particularly pounce when an honest mistake is made with regards to timing. I have seen multi-million-dollar settlements because a response is a day late or because an email was mistakenly deleted.
In this legislative session, the legislature amazingly seems to have realized this issue and has added provisions that specify that an action for bad faith must be submitted under a standardized form and give 90 days for response. This is a game changer for insurance companies who are subject to “bad faith” when honest timing mistakes are made.
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The bill also provides that mere negligence is not enough for bad faith (remember my accidental email deletion example) and that bad faith on the part of the claimant is also a factor. Requiring “good faith” on the part of the plaintiff’s attorney’s was one of the main things I was demanding last time the legislature took up this issue, as I have seen attorneys intentionally be confusing in their demands in an effort to confuse the insurance company to make it appear that the insurance company is acting in "bad faith".
In general I think this bill will substantially improve the legal situation in Florida with regards to bad faith. Here are references in relation to the PDF cited above:
On page 14, it says: “An action for bad faith involving an insurance claim, including any such action brought under the common law, shall not lie if the insurer tenders the lesser of ?the policy limits or the amount demanded by the claimant within 90 days after receiving actual notice of a claim which is accompanied by sufficient evidence to support the amount of the claim.”
On page 15, it says: “In any bad faith action, whether such action is brought under this section or is based on the common-law remedy for bad faith: (a) Mere negligence alone is insufficient to constitute ?bad faith. ?(b)1. The insured, claimant, and representative of the insured or claimant have a duty to act in good faith
Fraud Prevention
As someone engaged in fraud prevention, I strongly favor this bill. In my experience in Florida, when an insurance company reaches a point
This article can also be seen here: https://www.fraudspotters.com/proposed-florida-insurance-reform-hb-837/
Sales, Business Owner, Nurse, Semi-Retired
1 年As an advocative lobbying for the interests of Florida's Insurance Industry's criminal enterprise, the Floridian citizens have no interest in any more proposed insurance laws by you or people like yourself misrepresenting the truth in attempts to fool policyholders again. Your reforms of 2022 have worked out very well as intended, for the benefit of insurance carriers, NOT with the slightest benefit to policyholders. Fool us once, shame on us, fool us twice, shame on you. Peddle your propaganda some place else, the citizens of Florida are done. Your message is a day late and a dollar short. State reports published over the weekend point to insurance carrier fraud, NOT frivolous lawsuits, lol. Do us all a favor and encourage the insurance companies you represent to pull out of Florida. And please take all the republican legislators and public officials aligning their interests with insurance companies over the citizens of Florida to go right with them. This is not a fairy tale, the rampant fraud perpetrated by carriers has a bright spot light on them now.
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1 年Excellent summary. Claimants have always had litigation as an option when they disagreed with the offer of the insurer or its interpretation of the policy. Bringing FL toward the national standard may attract additional national insurers to write business.
Property & Insurance Expert
1 年It will not reduce the amount of lawsuits. But it will reduce the amount policyholders get in recovery money in hand after having to pay lawyers out of money they were owed. The recent whistle blowing adjusters upset about desk adjusters frauduntly changing their estimates is a real thing that happens often. Add in the unprepared, undertrained adjusters these laws hurt you, your mother and your friends.