Industry report blames attorney fees on government property insurance crisis | Business Observer | Business Observer

A new report reveals what many observers, experts and others, have been saying for years: The reason Florida taxpayers pay so much for property insurance is in attorney’s fees.

According to the Insurance Information Institute, Florida homeowners pay, on average, $4,231 in premiums. That’s three times the amount in the US – $1,544.

The report blames the attorney fee system as the culprit and cites many critics of the Florida system, including Gov. Ron DeSantis, always points to: Nationwide, 79% of all homeowner foreclosure lawsuits are filed in the state while only 9 percent are filed. % of actual insurance claims.

The agency also criticizes roofing contractors who get policyholders to sign off on premiums and sues insurance companies.

“Floridians are seeing homeowners insurance become less expensive and scarce because over the years the state has been home to many lawsuits and many fraudulent roof replacement schemes,” said Sean Kevelighan, CEO of the New York think tank. .

“These two factors contributed significantly to the decline in Florida home ownership that occurred between 2017 and 2021.”

The root of the problem goes back to a 2017 Florida Supreme Court ruling that allowed judges to award up to 2.5 times the plaintiff’s hourly rate when a law enforcement officer wins, the organization says. This means that lawyers are “earning several hundred thousand dollars for a simple case.”

What this does, critics have long argued, is give lawyers an incentive to file lawsuits and push cases that could easily be dismissed.

“In the best of circumstances, insurers would have to collect more money to pay claims and protect themselves from losses that bring money. This means increasing premiums,” the report said.

The property insurance division of the Florida Justice Association says lawyers are being unfairly targeted.

The organization’s judges work with consumers who are trying to collect on the grounds that they have legal rights and that the amount allowed to work is calculated by the judges who carefully examine the requests.

In addition to higher premiums, critics of the agency say, the current financial situation is driving insurance companies to make decisions or force them to stop writing Florida laws. The report says total losses recorded in Florida companies exceeded $1 billion in 2020 and 2021.

When companies go under or fail to register with the government, consumers’ options are limited, and they turn to Citizens Property Insurance Corp., which was created as an insurer of last resort.

According to the report, Citizens had 931,357 points established as of June 30. This is a 46% increase from June 2021 when it had 638,263 points and a 96% increase from June 2020 when it had 474,630 points. Having so many policies on his books could be dangerous for lawmakers and taxpayers if a hurricane hits the state.

But it’s not just bad hurricanes that citizens and government officials are worried about. According to the agency, lawsuits this year could cost citizens as much as $100 million.

Florida lawmakers attempted to pay attorney’s fees in a special session in May.

A bipartisan amendment introduced and signed into law by DeSantis created a new standard for using attorney fee increases and reduced attorney’s fees in property insurance cases, hoping to prevent frivolous claims.

But it’s too soon to say what impact the change will have as some critics are already saying it was approved by the support group.