On Friday, June 11, 2021, Governor Ron DeSantis signed Florida Senate Bill 76 (“SB 76”).  SB 76 reforms multiple areas regarding residential and commercial property insurance claims, with an ultimate goal of reducing the financial burdens placed on both insurers and their insureds as a result of the litigious nature of property insurance claims in Florida.  SB 76 becomes law and takes effect on July 01, 2021.

SB 76 covers a wide range of topics including:  new restrictions on both contractors as well as public adjusters; new reporting requirements for insurers on closed claims; new definitions and statutes of limitations for re-opened as well as supplement claims; new pre-suit notice of intent to initiate litigation; and a schedule to determine the amount of attorney’s fees due to the insured’s counsel.

Most importantly however is the new law, titled Suits Arising Under a Property Insurance Policy, which will be codified at Fla. Stat. § 627.70152.  § 627.70152 places a duty on insureds under a property insurance policy to file a Notice of Intent to file suit ten (10) days prior to filing suit, as well as a duty on the insurer to respond to the same based on the claims decision/investigation completed up to that point in time.  Finally,  § 627.70152 gives clear formulas for calculating the insured’s attorney’s fees and costs.

Notice of Intent.  The insured must file a Notice of Intent to file suit with the Department of Financial Services at least ten (10) days prior to the filing of the suit.  This notice must include a slew of information, including but not limited to:  the basic claim information; involved parties (contractors, attorneys, public adjusters, etc.); current amount of indemnity damages; current amount of attorney’s fees (and the calculation for the same); and a pre-suit settlement demand.

Response to Notice of Intent.  In response, the Insurer must take action within ten (10) days.  The action depends on whether a claim was denied prior to receipt of the Notice. If the claim was denied the Insurer has the option to:  (1) affirm denial; (2) retract from denial and open coverage; or (3) assert their right to reinspect.  The reinspection and decision to affirm the denial or retract from the same must occur within 14 days of asserting the right to inspect.  However, if the claim which the Notice is brought upon was not a denial, the insurer must either: (1) provide a settlement offer; or (2) proceed with a type of ADR such as mediation or arbitration.  If ADR is chosen, it must be completed within 90 days or the insured may file suit.

Dismissal.  The Court is directed to dismiss any suit without prejudice where the requirements of the Notice of Intent are not met or where one of the timing restrictions listed above is violated by a pre-mature filing of suit.

Attorney’s Fee.  Fla. Stat. § 627.70152 creates a schedule for determining all attorney’s fees associated with claims made by insureds on regular or surplus lines commercial or property insurance policies.  In addition, SB 76 amends both Fla. Stat. § 626.9373 and Fla. Stat. § 627.428 to reference the fee provision of § 627.70152.  In order to determine the amount of attorney’s fees due following a judgment for the insured one must first find the Disputed Amount between the Insured’s Pre-Suit Settlement Demand (made with the Notice) and the Insurer’s Pre-Suit Offer (made in response to the Notice). Once you have the Disputed Amount you determine what the Difference is between the Judgment Amount and the Pre-Suit Settlement Offer.  If the Difference is less than 20% of the Disputed Amount, then each side bears its own fees and costs.  If the Difference is above 20% but less than 50% of the Disputed Amount, then the Insured is entitled to their claimed fees multiplied by the percentage of the Difference (i.e. if the Difference is 40% of the disputed amount then the insured would be due their claimed attorney’s fees multiplied by .4).  Lastly, if the Difference is above 50% of the Disputed Amount, then the Insured is due the total amount of their fees.

Fla. Stat. § 489.147 – Prohibited Property Insurance Practices.  Fla. Stat. § 626.854 – Public Adjuster Defined; Prohibitions. SB 76 enacted § 489.147 and edited § 626.854 to prohibit certain practices by both certified contractors and licensed public adjusters, and their agents.  There are now prohibitions against offering anything of value in order to inspect the roof of a subject property or for making a claim related to the subject property.  In addition, there is no soliciting through either electronic or face-to face means allowed (i.e. cannot go door to door offering to inspect roofs).  Any individuals who isn’t a licensed contractor or licensed public adjuster and violates any of these items is also guilty of practicing contracting or public adjusting without a license (i.e. salesman for roofers).

Fla. Stat. § 624.424 – Annual Statement and Other Information.  This portion of SB 76 does not take effect until January 01, 2022.  This statute acts to require all insurers to report information on each closed claim following the effective date.  The information provided encompasses everything from the date/cause of loss and resolution information to the firms or companies who provided any assistance with repairs or investigation.

Fla. Stat. § 627.70132 – Notice of Property Insurance Claims. This statute gives clear definitions for re-opened claims (same claimed damages but additional funds needed to complete repair) and supplemental claims (new damages discovered or incurred during administration of repairs related to original claim).  Further the statute imposes a limitation to file actions on original and reopened claims (first notice of loss must be within two (2) years of date of loss), as well as supplemental claims (must be withing three (3) years of date of loss).  Most importantly, the statute states that for all storms (wind, hurricane, hail, etc.) the date of loss must be the date where the hurricane made landfall or the date verified by the National Oceanic and Atmospheric Administration.

The provisions of SB 76 will aid in ensuring that all claims brought against a property insurer are objectively verified and substantiated.  The Notice of Intent, prescriptions against solicitations by contractors and public adjusters, emphasis on proper reporting of dates of loss, and threshold to determine attorney’s fees should assist both sides of the aisle in coming to efficient and palatable resolutions that may have been previously litigated for years due to lack of information or incorrect information asserted alongside pre-maturely filed claims.

If you have any questions about this update or would like to refer a property damage matter, please contact our attorneys.