Most homeowners in Florida have been asking themselves and their HH Insurance agents the same question in recent years regarding homeowners insurance Tampa, FL. The question is, “Why has my rate increased exponentially year-over-year for the last several years?” This is not a question simply answered, and many reasons are in play here. The Florida state legislature held a special session in December of 2022 to address this topic and a few others. For most individuals with some understanding of the marketplace and home insurance Tampa Bay FL, in general, this session was considered to have achieved several goals. These goals would ideally help address some driving forces towards this issue regarding high rates and Florida home insurance quotes.
One-Way Attorney Fees Florida
One big topic is a practice we call “one-way attorney fees.” One-way attorney fees was a practice where if an individual who was in the process of a claim with their insurance carrier was unhappy with the offered payout amount and they hired an attorney to take the carrier to court, the payment of fees was enough of a deterrent to insurance companies to avoid court at all costs. So for many years, if an individual took their carrier to court and they were to lose, the individual would pay their attorney fees. Then the insurance carrier would pay out the amount they offered for the claim and have to pay their own attorney’s fees.
Conversely, if the judgment were settled in favor of the individual, the insurance carrier would then have to pay out the claim amount, pay their own attorney’s fees, and then pay the individual’s attorney fees on a three times multiplier – meaning if the individual had $10,000 in attorney fees from the case, the insurance carrier paid that attorney $30,000. Naturally, this resulted in many attorneys pushing clients to sue their insurance company, making insurance companies hesitant to go to court. In turn, they ended up paying out on many claims that were at least partially fraudulent. As a result, this provision was repealed, and the idea here is to reduce the number of lawsuits between individuals and their insurance carriers.
While this is only one of many topics addressed in the special session, it’s one of the more critical topics that individuals within the home insurance Tampa Bay FL, industry feel is a step in the right direction. Of course, one cannot expect years and years of practice to be corrected overnight or within a week. Still, it is reassuring to see the proper attention given to such an important matter for most homeowners in Florida.
Florida Assignment of Benefits Legislation
In recent years, a significant driver in the homeowners insurance Tampa, FL market is a practice called “Assignment of Benefits.” Where individuals sign over their rights to receive payment from an insurance claim to another party, the most effective practice that has created a wedge in the market is where roofing companies door-knock through neighborhoods. Roofing companies do this before, during, or after any event that includes heavy wind in an area. Whether or not the client has sustained real wind damage to their roof, they would be informed that they were entitled to a brand-new roof for free.
However, knowingly or unknowingly, the roofing company would have the individual sign over their rights to claim their insurance. The company would then replace the roof and file a claim against the individual’s insurance policy to receive payment for the job. This has been immediately repealed, and any policies issued after January 1st of 2023 will not allow individuals to sign over the rights of their policy to any third party.
While this is only one of many topics addressed in the special session, it’s one of the more critical topics that individuals within the industry feel are a step in the right direction. Of course, one cannot expect years and years of practice to be corrected overnight or within a week. Still, it is reassuring to see the proper attention given to such an important matter for most homeowners in Florida.
Florida Mandatory Mediation
A popular new option for insurance companies, such as HH Insurance, is to offer clients within their Florida home insurance quotes and policies. A clause referred to as “mandatory mediation-arbitration.” If clients opt into this, they will receive a discount on their homeowners insurance Tampa policy. This clause states that if the client has a claim and the insurance carrier disagrees with the amount that should be paid out, the client cannot hire an attorney to file suit against the insurance carrier. Instead, the two parties agree to go to arbitration if there is a dispute or disagreement on a claim payout amount. A neutral, 3rd party arbitrator will listen to information from both parties and determine the proper amount that should be paid out. This is another practice to lower the number of lawsuits between individuals and insurance carriers.
While this is only one of many topics addressed in the special session, it’s one of the more critical topics that individuals within the industry feel are a step in the right direction. Of course, one cannot expect years and years of practice to be corrected overnight or within a week. Still, it is reassuring to see the proper attention given to such an important matter for most homeowners in Florida.
**This blog provides a brief overview of the terms and phrases used within the insurance industry. These definitions are not applicable in all states or for all insurance and financial products. This is not an insurance contract. Other terms, conditions and exclusions apply. Please read your official policy for full details about coverage. These definitions do not alter or modify the terms of any insurance contract.