Florida Senate Bill 76 (“SB76”), in essence, created Florida Statute Section 489.147 and amended Florida Statute Section 626.854. The bill’s creators claimed to be seeking a way to lower rising property insurance premiums by circumventing behavior of the contractors and public adjusters whom these lawmakers alleged exerted pressure on homeowners (or at least encouraged 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. The original SB76 was somewhat tedious, but following a ruling from the judiciary as to which sections should be excluded as being in violation of certain provisions of the Florida and Federal Constitutions, SB76 was extensively revised. A general recap of the more salient parts of the statutory provisions 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.
However, a written or electronic communication by a contractor 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 does not qualify under the definition of “prohibited advertisements” if the communication is in writing in at least 12-point font (or at least half the size of the largest font used in the communication, whichever is larger), and states that:
- The consumer is responsible for payment of any insurance deductible;
- It is insurance fraud punishable as a felony of the third degree for a contractor to knowingly or willfully, and with intent to injure, defraud, or deceive, pay, waive, or rebate all or part of an insurance deductible applicable to payment to the contractor for repairs to a property covered by a property insurance policy; and,
- It is insurance fraud punishable as a felony of the third degree to intentionally file an insurance claim containing any false, incomplete, or misleading information.
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. If the contract is executed during a declared “state of emergency” by the Florida Governor, the voidability date extends to include all time between the execution and the “official start date”, which is defined as (the earlier of) “the date on which work that includes the installation of materials that will be included in the final work on the roof commences, a final permit has been issued, or a temporary repair to the roof covering or roof has been made in compliance with the Florida Building Code.”
Moreover, if the contract is executed during such a state of emergency, the contract must also state (in bold type of not less than 18 points, immediately before the space reserved for the signature):
“You, the residential property owner, may cancel this contract without penalty or obligation within 10 days after the execution of the contract or by the official start date, whichever comes first, because this contract was entered into during a state of emergency by the Governor. The official start date is the date on which work that includes the installation of materials that will be included in the final work on the roof commences, a final permit has been issued, or a temporary repair to the roof covering or roof system has been made in compliance with the Florida Building Code.”
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.
Florida Statute Section 626.854(16) indicated that the prohibitions in Florida Statute §489.147 do not bar the contractor from “suggesting or otherwise recommending to a consumer that the consumer consider contacting his or her insurer to determine if the proposed repair is covered under the consumer’s insurance policy”, as long as the contractor’s communication with the homeowner complies with the other statutory provisions, and further allows a contractor to discuss the repair in relation to the homeowner’s applicable policy of insurance “if the contractor is doing so for the usual and customary fees applicable to the work to be performed as stated in the contract between the contractor and the insured.”
This statute section further maintains that, unless the contractor also holds an active public adjuster license, any violation of this provision could subject the contractor or its agent to criminal charges of “unlicensed practice of public adjusting”, which is punishable as a third-degree felony and includes a civil fine not to exceed $10,000 per offense ($20,000 if the act occurred during the aforementioned state of emergency).
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