Property Insurance Reform – S.B. 2-D (Special Session)

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Assignment of Benefits Prohibits assignment of the right to obtain

Assignment of Benefits

Prohibits assignment of the right to obtain attorney fees in suits arising out of a property insurance policy to persons other than a named or omnibus insured or a named beneficiary under the policy.  Result is that assignment agreements may occur, but the assignee vendor will no longer be able to recover attorney fees in suits against an insurer.  Applies to property insurance lawsuits brought by vendor assignees against authorized insurers and surplus lines insurers.  Eliminates statutory language detailing the methodology for awarding attorney fees to plaintiffs or defendants in litigation brought by an assignee of benefits under a property insurance policy.  The language is no longer necessary because the bill prohibits assignment of the right to recover attorney fees in suits arising out of a property insurance policy.  Revises the definition of “assignment agreement” to include assignments executed by a party that inspects the property, clarifies that public adjuster fees are not an assignment agreement, and clarifies the requirement to provide a Notice of Intent to Initiate Litigation before filing suit.  Requires that a valid AOB must specify that the assignee will hold harmless the assignor from all liabilities, including attorney fees.

 

Attorney Fee Multipliers

Creates a new standard for the award of an attorney fee multiplier in property insurance litigation.  Creates a presumption that in property insurance cases, attorney fee awards based on the Lodestar methodology are sufficient and reasonable.  Attorney fee multipliers may only be awarded under rare and exceptional circumstances with evidence that competent counsel could not be hired in a reasonable manner.  Allows a court to award attorney fees when a first-party claimant’s property insurance suit is dismissed without prejudice for failure to provide a Notice of Intent to Initiate Litigation.

 

Attorney Fees Dismissal for Failure to Provide Notice

Provides that a defendant insurer may obtain attorney fees and costs associated with securing a dismissal without prejudice for failure to provide the required Notice of Intent to Initiate Litigation at least 10 days before filing a suit against a property insurer.

 

First Party Bad Faith

Requires a claimant to establish a property insurer breached the insurance contract in order for the claimant to prevail in a bad faith claim for extracontractual damages under s. 624.155(1)(b), F.S. Applies  to civil remedy actions based upon a property insurer: not attempting in good faith to settle claims when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for his or her interests; making claims payments to insureds or beneficiaries not accompanied by a statement setting forth the coverage under which payments are being made; or except as to liability coverages, failing to settle claims promptly, when the obligation to settle a claim has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy.

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