Florida has more property lawsuits against insurers than any other state, according to a new report from the Office of Insurance Regulation. (Scott Olson/Getty)
Nearly three-quarters of all U.S. lawsuits filed by homeowners against their property insurance companies were made in Florida, a new report says, as state lawmakers consider reforms to the system.
The report suggests that litigation is driving higher insurance costs in a state that has seen insurors raise homeowners’ rates by 30% or more.
In 2019, Florida homeowners accounted for 76% of such suits, according to the report by the Florida Office of Insurance Regulation. The study also found that state residents filed just 8% of all property insurance claims in the nation that year.
OIR Commissioner David Altmaier put the new statistics in a letter dated April 2 to Rep. Blaise Ingoglia, R-Spring Hill, chairman of the House Commerce Committee, a document meant to supplement a report OIR sent to the committee in February.
Using data from the National Association of Insurance Commissioners of which Altmaier is also president, the agency found Florida to be responsible for more than 60% of property insurance litigation nationally since at least 2016. The letter did not provide any information about previous years, and 2019 was the most recent data available.
The report in February identified "costly litigation" as one of the primary drivers for rising insurance premiums in the state. Last year, OIR approved rate hikes of more than 30% for some insurance companies. Companies only need to ask for approval if seeking to raise rates by more than 15%.
Altmaier’s letter also said Florida’s ratio of claims closed without payment to lawsuits opened was 27%, eight times higher than the next state, Connecticut, where the ratio was 3.4%. That means more Florida homeowners filed lawsuits after not receiving a payment for their claim than in any other state by a margin of eight to one.
The issue has led to an explosion in policies for the state-run Citizens Property Insurance, a situation that led Citizens CEO Barry Gilway last year to call Florida’s insurance market "unhealthy."
Altmaier’s letter concludes by suggesting solutions the Legislature may consider to bring down the number of cases. They include measures such as reducing attorneys’ fees to make lawsuits less attractive to lawyers and modifying laws to reduce the number of roof claims.
Some of these ideas appear in HB 305, introduced in January by Rep. Bob Rommel, R-Naples. The bill also seeks to stem practices by contractors and independent agents that experts say is causing the rise in roof claims.
But attorneys such as Mark Nation of Morgan & Morgan say that the measures in the bill will hurt homeowners by limiting access to the courts.
"You think there are a lot of denials now?" Nation said in a Sentinel interview last year. "Think about if people like me didn’t exist."
In the House earlier this month, the bill went to the Commerce Committee, on which Rommel sits. A companion bill, SB 76, passed the Senate April 9.