Florida lawmakers file bills to bring major changes to state’s property insurance system

by | Dec 9, 2022

  • House and Senate lawmakers filed proposals late Friday for a radical overhaul of the state’s property insurance system
  • HB1A and SB2A propose doing away with controversial assignment of benefits provisions and one-way attorney fees
  • Another aim of the proposal is to push homeowners out of state-backed Citizens insurance and into private coverage plans

TALLAHASSEE — With a special legislative session poised to start, the Florida House and Senate late Friday released proposals that would make far-reaching changes in the state’s troubled property-insurance system.

The bills (HB 1A and SB 2A) would take steps to reduce litigation costs, move policies out of the state-backed Citizens Property Insurance Corp., offer additional reinsurance to insurers and try to speed up claims.

The bills, which each top 100 pages, appeared nearly identical, indicating that House and Senate Republican leaders have agreed on the major details.

“I believe the goal we all share is for Florida to have a robust property insurance market that offers homeowners the opportunity to shop for insurance that meets their needs and budget,” Senate President Kathleen Passidomo, R-Naples, said in a memo to senators. “We also want to make certain that when damage occurs, claims are paid promptly and fairly, so homeowners do not have to contend with time-consuming and expensive litigation. SB 2A continues our efforts to focus on fair costs and strong protections for consumers while adding reasonable guardrails for insurance companies against the frivolous litigation and fraudulent claims that drive up rates for everyone.”

The insurance market has faced massive problems during the past two years, with insurers seeking large rate increases and dropping hundreds of thousands of customers because of financial losses. Citizens, which was created as an insurer of last resort, has seen its policy count more than double to 1.13 million.

Among the key proposed changes:

— The bills would eliminate requirements that property insurers pay the attorney fees of policyholders who successfully file lawsuits over claims. Insurers have long blamed the requirements for spurring litigation and driving up costs, while plaintiffs’ attorneys argue the elimination would make it financially difficult for policyholders to pursue valid lawsuits.

— The bills would largely eliminate a controversial practice known as “assignment of benefits” for property-insurance claims. In assignment of benefits, policyholders sign over claims to contractors, who ultimately seek payment from insurers. Insurance companies contend that the practice increases lawsuits.

— The bills would seek to push policyholders out of Citizens and into coverage from private carriers. For example, Citizens policyholders would not be able to renew their coverage if they receive policy offers from private insurers that are within 20 percent of the cost of the Citizens premiums. Citizens officials say the state-backed insurer typically charges less than private insurers, creating a disincentive for policyholders to get coverage in the private market.

— The bills would create the Florida Optional Reinsurance Assistance Program, which would make available additional reinsurance to carriers. Reinsurance, which is essentially backup coverage, plays a crucial role in Florida but has become increasingly expensive and difficult to purchase.

— The bills would make a series of changes related to claims, such as shortening a time frame from 90 days to 60 days for insurers to deny or pay claims. Also, the bills would reduce from two years to one year the time for policyholders to provide notices of loss for initial claims and reopened claims.

The special legislative session will start Monday, with one of the noisiest debates likely to focus on attempts to reduce litigation.

“Litigation has caused costs to policyholders and alike to outstrip the premiums that are being paid,” Fred Karlinsky, a prominent insurance lobbyist and attorney with the Greenberg Traurig firm, said Friday night after the bills were released. He added that the bills will “hopefully serve to curb the abuses we have seen proliferate,” while providing balance.

But House Speaker Paul Renner, R-Palm Coast, acknowledged last month that whatever passes during the special session will not quickly lead to lower rates for consumers.


  1. wordpresing1

    The legislature needs to be more fair and balanced with these bills. I’m all for curbing frivolous lawsuits but see no point in eliminating the requirement that property insurers pay attorney fees of policyholders who successfully file lawsuits. That provision keeps insurers honest and responsive while still deterring frivolous suits by property owners. Better to shorten the time that owners must bring claims following alleged damages to a few months. Crooked roofers often seem to suddenly find hail or wind damage years after significant storms. Doing away with “assignment of benefits” is wise, but subsidizing reinsurance for insurance companies will help keep policy premiums high, as will the requirement that homeowners take insurance offers that are up to 20% higher than Citizens.

  2. Robert

    The AOB situation is/was bad enough, but frivolous homeowner lawsuits? No, they aren’t going anywhere. Plaintiff Attorneys and their clients will continue to file these because the cost of defending them and/or filing a motion to dismiss these meritless claims is still MORE costly than to settle. Insurance Companies and their Attorneys know this, Plaintiff’s Attorneys and their Clients know this, the Florida Department of Insurance knows this, the Florida Bar knows this, the Florida legislature and the State and Federal Judiciary knows this … ad nauseam In other words – NOTHING is being done to curb this lawyer abuse. They would have no compunction bankrupting every private insurance company doing business in Florida (or driving them out of the state) before directing their full attention to Citizens and bankrupting them as well. How about some LITIGATION reform Florida Legislature ?

  3. Daniel Rousseau

    Just remember, the insurance industry has a hand in writing every bill the Legislature will be considering during the special session. Nothing will be passed that does not favor the insurance industry ahead of the policy holder. Also, the Florida Bar Association will be equally diligent to ensure that lawyers are not shortchanged by new laws. If you think the homeowner will be the greatest beneficiary of property insurance reform . . . well, the more fool, you.

  4. Robert

    Then ENJOY your HIGHER Homeowner’s Insurance premiums as more Insurers leave the state. Citizens has now topped more than 1 millions policies in Florida, writing an average of 32,000 new policies a month. As more and more private insurers go belly-up and/or leave Florida and Citizens finally closes its doors, please note your lender will be HAPPY to add the coverage from an Insurer of THEIR own choosing at a minimum cost of at least THREE times or more that of your previous highest premium. If your home is paid for, you’ll still find it difficult to impossible to buy coverage. And don’t tell me the plaintiff’s bar and/or their lobbyists don’t have their greedy hands in writing every new bill — PUH-LEEZE, who are YOU kidding? You remind me of that old Neapolitan proverb … to wash a donkey’s tail is a loss of time and soap –

  5. dorinemckinnon

    When long time insurers like State Farm and Allstate decide to leave Florida’s homeowners insurance market, they should also have to leave behind the profitable renter’s and vehicular insurance as well.. Perhaps the Florida should require a certain base percentage of homeowners’ policies that must be marketed to market any type of insurance in Florida.

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