ORLANDO, Fla. – Gov. Ron DeSantis laid out potential proposals Thursday to correct the state’s crippled insurance market.
One issue he alluded to that is gaining momentum is eliminating “one-way attorney’s fees.” If taken away, it could make suing insurers more expensive.
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We have heard over and over that excessive litigation associated with roofing schemes is to blame for sky-rocketing insurance premiums, but Michelle Hosmer of Merritt Island said insurers denying legitimate claims are partially to blame.
“I don’t really think the litigation is the people’s fault. It’s the insurance company’s fault,” Hosmer told News 6.
Hosmer said that before the 2021 hurricane season started, she had her roof inspected.
“I wanted to check and see if my roof was sound,” she said.
She said the roofing company highlighted and circled hail damage believed to be from a 2019 storm.
When she filed a claim with her insurance company of 10 years, the company agreed in a letter that there was damage but stated the “damages were suggestive of wear and tear,” and they were unable to provide coverage.
The claim was denied.
“I just felt like they were calling me a liar, and it made me angry,” Hosmer said.
Hosmer then called an adjuster who did his own inspection and took more pictures.
“(I) sent the insurance company a 72-page report with pictures and descriptions and all of that, and they still denied it,” Hosmer said.
Hosmer retained an attorney and filed a lawsuit for breach of contract. Less than a year later, they reached a settlement.
Instead of just the roof price of $13,400, the insurance company paid $4,000 to the adjuster, $16,000 to Hosmer and another $9,000 for her attorney’s fees, which is $15,600 more than the price of the roof.
“For the most part, insurance companies are doing that to themselves,” Hosmer said.
“If they would accept the claims instead of denying them right off the back, there wouldn’t be as much litigation,” Hosmer said.
Mark Friedlander is with the Insurance Information Institute
“There are always going to be disputes over claims,” Friedlander said. “The concern we have here in Florida is the disproportionate level of litigation.”
Florida makes up 9% of the nation’s homeowner insurance claims, but 79% of the country’s homeowner insurance lawsuits, according to Florida’s Office of Insurance Regulation.
“It is a cash machine for some trial attorneys here in Florida, and the reason why is the one-way attorney fees,” Friedlander said.
One-way attorney fees are when insurers pay a homeowner’s attorney fees if the homeowner is successful in court after litigation.
Former State Sen. Jeff Brandes told News 6 the state should change that law during the next special session.
“Seventy percent of the dollars paid out by the insurance companies last year went to the trial bar, 20% went to their defense cost, and only 10% went to homeowners. There’s something wrong with the math,” Brandes said.
Dropping one-way attorney fees means consumers could have to pay their own attorney fees if they decide to sue their insurer.
But there is a caveat — the legislature could do away with one-way attorney fees for third parties like contractors.
The intent is to stop bad actors from exploiting the one way attorney fees law via Assignment of Benefits.
Lawmakers have set aside Dec. 12-16 for the special session.
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