State Senator Jim Boyd (R-Bradenton), Chair of the Senate Committee on Banking and Insurance, today filed Senate Bill (SB) 76, an act relating to residential property insurance.

Boyd, who in addition to being a state senator is also an executive with an insurance company, said the legislation will reduce premiums for home owners. But, according to the bill’s opponents, it does so by putting the policyholder at risk.

Opponents say the bill restricts a homeowners’ ability to reclaim attorney fees if they are successful in a claim against an insurance company in property-insurance disputes and limits how much an insurer is compensated for roof damage following a storm.

Merlin Law Group President Chip Merlin, of Tampa, specializes in the representation of policyholders in disputes with insurance companies. He called the proposed legislation “the most anti-consumer, anti- policyholder” he has seen in quite some while.

The bill addresses what insurance companies see as a “proliferation of litigation that has driven up the cost of property insurance across the state” by requiring detailed notice of property insurance claims prior to litigation and changes how attorney fees are awarded.

“We want to make certain that Floridians have access to property insurance that is both reliable and affordable. Right now we have a situation in our state where homeowners are paying more for their property insurance, and yet insurance companies are suffering massive losses,” said Boyd. “These higher premiums and massive losses directly correspond to an increase in claims, many of which are related to roof coverage and filed years after damage occurs, as well as a huge increase in property insurance related lawsuits.”

Policyholders, however, claim the lawsuits are a result of insurance companies’ slow or inadequate response to homeowners’ claims following several of the last hurricanes, particularly Hurricane Michael.

Currently, an insurer must pay a reasonable attorney fee to the insured’s attorney, even if the insured only recovers a small amount in the litigation. Under this legislation the insurers’ obligation to pay the insured’s attorney fees will be directly related to how successful the insured was in recovering the amount demanded in the litigation.

Under the bill, if the claimant recovers at least 80 percent, the insurance company must pay all reasonable attorney fees. But, if the claimant recovers 20 percent or more of the demand but less than 80 percent, the insurer will be required to pay the same percentage of fees related to the recovery that the claimant recovered in the action. For example, if the claimant demanded $20,000 and recovered $10,000, the insurer will pay 50 percent of the claimant’s attorney fees because the claimant’s recovery was 50 percent of the demand. If the claimant recovers less than 20 percent of the demand, the insurer has no obligation to pay the claimant’s attorney fees.

“This bill does not help policy holders,” Merlin told The Capitolist, “however, it certainly does help the insurance company. It certainly should reduce insurance premiums if you can no longer sue your insurance company for a breach of contract.”

The bill also singles out roof-damage claims, as insurers say they have faced a surge of questionable and potentially fraudulent claims. Boyd’s bill would require insurers to use what is described as a “roof surface reimbursement schedule.”

“Unfortunately, Florida has become a beacon for companies who canvass neighborhoods creating roofing claims that would not otherwise be filed, driving up the cost of insurance for everyone,” said Boyd. “This legislation ensures that there is a clear understanding between homeowners and their insurance companies about when a roof replacement will be covered in full, and when a homeowner will be responsible for paying a certain portion of the replacement cost. It also establishes a clear and reasonable two-year time period for filing a claim.”

Under the proposal, reimbursements could vary based on ages and types of roofs. Insurers would be required to provide full replacement coverage for roofs less than 10 years old. But they would be allowed to adjust roof claims to actual cash value if the roof is older than 10 years.

Merlin said this will leave the homeowner holding the bag. “If the policyholder has a mortgage and needs a new roof, he’s not going to get paid back by the insurance company which violates a homeowner’s mortgage.”

Merlin described SB 76 as a “very unique piece of legislation that shows these legislators are just in bed with the insurance lobbyists.”