Gov. DeSantis Signs Key Legal Reform Bill In Florida

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SB 2-A to improve FL property insurance; addresses assignment of benefits, one way attorney fee shifting, third-party bad faith


The American Tort Reform Association applauds the Florida legislature for passing and Governor Ron DeSantis (R) for signing Senate Bill 2-A to address the property insurance crisis in Florida. The legislation includes much needed assignment of benefits, one way attorney fee shifting, and bad faith reforms.

Under the new law, insurers will be protected from excessive jury awards in lawsuits involving property damage or personal injury. This will help insurance companies continue providing affordable coverage to Florida residents while keeping premiums stable.

Florida is home to more property insurance lawsuits than the rest of the country combined. While Florida accounts for only 7% of the nation’s homeowners’ claims, the state accounts for 76% of the nation’s homeowners’ insurance lawsuits.

The cost of defending these lawsuits in Florida has increased exponentially over the past several years.

In 2016, insurers paid $1.5 billion defending these lawsuits and that number doubled to $3 billion in 2021. Unfortunately, the consumers are not reaping the benefits from this increase. 71% of the money goes to the plaintiffs’ attorneys while plaintiffs receive a mere 8%. The remaining 21% pays for the defense attorneys.

The property insurance crisis has a very real impact on Florida property owners and insurers. As of August, five insurance companies had gone out of business in 2022, after 4 exited the market in 2021. This has led to a massive shortage of coverage at a time when Floridians impacted by Hurricane Ian are in desperate need.

“We would like to thank Governor DeSantis and the Florida legislature for their leadership in passing this important legislation,” ATRA President Tiger Joyce said. “We are committed to supporting efforts to improve the legal system and promote fair and reasonable policies. This is a positive step that will help to improve the civil justice system in Florida, but there is still work to be done. We look forward to working with state leaders to address transparency in damages reform in the upcoming 2023 session.”

Jurisdictions in Florida were named on the American Tort Reform Foundation’s (ATRF) list of Judicial Hellholes® for 16 years. This year, ATRF included the Florida Legislature on its Judicial Hellholes® “Watch List.”

Lawsuit abuse and excessive tort costs wipe out billions of dollars of economic activity annually. Florida residents pay an annual “tort tax” of $812.52 per person and more than 173,000 jobs are lost each year, according to a recent study by The Perryman Group. If Florida enacted specific reforms targeting lawsuit abuse, the state would increase its gross product by over $17.66 billion.


Background on Florida Senate Bill 2-A (2022)

Awards of Attorney Fees in Litigation Under Property Insurance Contracts

  • Provides that the one-way attorney fee provisions of s. 627.428, s. 626.9373, and s. 627.70152 are not applicable in a suit arising under a residential or commercial property insurance policy.
  • Reinstates application of the civil offer of judgment statute to civil actions arising under a residential or commercial property insurance policy.
    • Allows joint offers of settlement in property insurance litigation contingent on acceptance of all joint offerees.
  • Removes provisions regarding attorney fees relating to the alternative procedure for resolution of disputed sinkhole insurance claims.

Assignments of Benefits

  • Prohibits the assignment, in whole or in part, of any post-loss insurance benefit under any residential property insurance policy or under any commercial property insurance policy issued on or after January 1, 2023.

Bad Faith Failure to Settle Actions Against Property Insurers

  • Provides that bad faith litigation for failure to settle a property insurance claim may not be filed until after the insured has established through adverse adjudication by a court that the insurer breached the insurance contract and a final judgment or decree has been rendered against the insurer.

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