Florida Senate Bill 76 (“SB76”), in essence, creates Florida Statute Section 489.147 and amends Florida Statute Section 626.854. The bill’s creators claim to be seeking a way to lower rising property insurance premiums by circumventing behavior of contractors and public adjusters these lawmakers allege pressure homeowners (or at least encourage them) to make unnecessary repairs and related insurance claims. The bill was signed into law on June 11, 2021 and became effective July 1, 2021. SB76 is somewhat tedious, but a recap of the more salient parts of the legislation are provided below:
Florida Statute § 489.147 modifies several provisions that impact Florida’s property insurance litigation. It starts by prohibiting the “solicitation” of residential property owners through “prohibited advertisements” which “encourages, instructs, or induces a consumer to contact a contractor or public adjuster for the purpose of making an insurance claim for roof damage.” These advertising materials include, but are not limited to: door hangers, business cards, magnets, flyers, pamphlets, and e-mails, as well as any “communication,” whether written, electronic, telephonic, or delivered in person (meaning orally).
To this end, a contractor is barred from directly or indirectly:
- soliciting a residential property owner by means of the above-described “prohibited advertisements”; or
- offering a rebate, gift, gift card, cash, coupon, waiver of any insurance deductible, or any other thing of value in exchange for allowing the contractor to conduct an inspection of the residential property owner’s roof or make an insurance claim for damage to the residential property owner’s roof; or
- offering, delivering, receiving, or accepting any compensation, inducement, or reward, for the referral of any services for which property insurance proceeds are payable; (payment to a contractor for roofing services rendered does not constitute compensation for a referral) or
- interpreting policy provisions or advising an insured regarding coverages or duties under policy or adjusting a property insurance claim on behalf of the insured unless contractor also holds public adjuster license; or
- providing an insured with an agreement authorizing repairs without providing a good faith estimate of the itemized and detailed cost of services and materials. (a contractor does not violate this paragraph if, as a result of the process of the insurer adjusting a claim, the actual cost of repairs differs from the initial estimate).
A contractor who violates this section is subject to disciplinary proceedings by the Construction Industry Licensing Board as well as a statutory fine up to $10,000 for each violation. The legislation also requires a contractor to include a new statutory notice in any residential roofing contract (repair or replace):
Florida law prohibits contractors and those acting on the contractor’s behalf from offering residential property owners a rebate, gift, gift card, cash, coupon, waiver of any insurance deductible, or any other thing of value in exchange for allowing the contractor to conduct an inspection of the residential property owner’s roof or making an insurance claim for damage to the residential property owner’s roof.
Failure to include this advisory furnishes the homeowner the right to void the contract within 10 days of its execution, as opposed to the typical 3-day rule.
Presently, there is a preliminary injunction issued by the United States District Court, Northern District of Florida as to the enforcement of subsections 489.147(2)(a), (3), and 4(b), as they pertained to “prohibited advertising” until “otherwise ordered.” However, it is more likely that the legislature will address the detailed ruling on the First Amendment issue before the courts can render a ruling on the matter. Therefore, it is important that you remain up to date on the status of the statutory provision.
SB76 also 1) decreases the time limit to file insurance claims, 2) introduces a pre-suit notice requirement, 3) provides limitations on attorney’s fees, and 4) permits the consolidation of related lawsuits.
- Decreases the time limit to file insurance claims:
Under Florida Statute § 627.70132, there is a three-year limitation period to report a hurricane claim to the property insurance carrier. The new statute expands this statute to encompass all property insurance claims. A “reopened claim” (one that was previously closed but reopened for additional costs for loss or damage previously disclosed) is now limited to within two years of the date of original loss, and a “supplemental claim” (a claim for additional loss or damage from the original claim or for costs incurred while completing repairs related to the original claim) is now limited to within three years of the date of original loss.
- Introduces a pre-suit notice requirement:
A homeowner must now provide to its insurer a notice of intent to litigate at least 10 business days prior to filing a lawsuit. The notice must be on a form to be provided by the Department of Financial Services and furnished to the insurer through the email address on file with the Department. If the notice is provided following acts or omissions by the insurer other than denial of coverage, it must also contain a pre-suit settlement demand with itemize the damages, attorney fees, and costs, AND the disputed amount. Following the notice, the insurer must respond in writing within 10 business days of the notice by accepting coverage, continuing to deny coverage, or asserting the right to re-inspect the premises, which must then occur within 14 business days of the demand for inspection. Thereafter, unless the claim is denied, the insurer must respond by making a settlement offer or requiring alternative dispute resolution. Alternative dispute resolution, which includes appraisal, must be completed within 90 days. If the claimant does not comply with the mandatory pre-suit notice, the new statute requires a court to dismiss the lawsuit without prejudice. This new notice requirement extends the five-year statute of limitations by the time it takes to participate in this process.
- Provides limitations on attorney’s fees:
SB76 limits the award for attorneys’ fee based on the results obtained, as follows:
- if the difference between the amount obtained and the pre-suit settlement offer (excluding attorney fees and costs) is less than 20% of the disputed amount, the insured is not entitled to attorneys’ fees.
- if the same relative difference is greater than 20% but less than 50%, the insurer pays the claimant’s fees and costs in a proportion equal to that percentage (i.e. an award 35% above the pre-suit settlement offer will net an award of 35% of the claimed fees and costs);
- if the same relative difference is 50% or greater, the insurer pays the full number of attorneys’ fees and costs.
This will be an important factor for any homeowner to consider prior to initiating any action against its insurer for these claims.
- Permits the consolidation of related lawsuits:
Such as a homeowner claim and an AOB claim related to the same loss or peril.
The changes and amendments to Florida Statute Section 626.854 essentially mirror these, but for public adjusters.
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