As mentioned in a latest consumer alert, on March 24, 2023, Florida Governor Ron DeSantis signed Home Invoice (HB) 837 into legislation, making it tougher and dear for insurance coverage policyholders of all sizes to sue insurers for unhealthy religion by eliminating fee-shifting for many policyholders and requiring one thing “greater than” negligence for unhealthy religion claims.
HB 837’s Influence on Insurance coverage Protection Claims:
HB 837 is one other in a sequence of reform laws lately handed in Florida that considerably impacts policyholders’ potential to carry their insurers accountable for the wrongful failure to pay advantages due below the insurance coverage contract. Latest efforts embrace final 12 months’s repeal of the one-way fee-shifting statute for claims introduced below residential and business property insurance coverage insurance policies. Beforehand, the fee-shifting statute allowed policyholders to recuperate attorneys’ charges from their insurers when the policyholder prevailed in a protection motion. HB 837 repeals Part 627.428 of the Florida Statutes completely, extending the repeal of the one-way fee-shifting statute to all kinds of insurance coverage protection disputes—not simply these below residential and business property insurance coverage insurance policies.
Now, a policyholder can recuperate attorneys’ charges provided that it recordsdata a declaratory judgment motion in opposition to the insurer when the insurer points a “whole protection denial.” Be aware, nonetheless, that this doesn’t apply to “any motion arising below a residential or business property insurance coverage coverage.” The statute leaves open questions on what constitutes a “whole protection denial,” however the invoice explicitly states {that a} legal responsibility insurer’s protection below a reservation of rights is inadequate to represent a “whole protection denial” to set off the potential for a payment award. Consequently, policyholders are actually compelled to litigate protection actions at their very own expense, even the place the insurer unreasonably denies protection and thus necessitates the submitting of the protection motion in opposition to it.
HB 837’s Influence on Insurance coverage Dangerous Religion Claims:
The invoice additionally alters Florida’s unhealthy religion statute and customary legislation unhealthy religion actions. The statute gives that in each statutory and customary legislation unhealthy religion actions, “mere negligence alone is inadequate to represent unhealthy religion” and imposes a “good religion” normal on policyholders. Juries now could contemplate the policyholder’s conduct “in furnishing data concerning the declare, in making calls for of the insurer, in settling deadlines, and in trying to settle the declare” to be able to “moderately scale back the quantity of damages awarded in opposition to the insurer.”
Additional modifications to Florida’s widespread legislation and statutory unhealthy religion causes of motion embrace:
- Policyholders can’t convey a typical legislation or statutory unhealthy religion declare in opposition to insurers the place the insurer tenders the lesser of (1) the coverage limits or (2) the quantity demanded by the policyholder inside 90 days after receiving each precise discover of a declare and enough proof to help the demanded quantity of the declare. The insurer’s failure to tender the lesser of the coverage limits or the quantity demanded is inadmissible in any unhealthy religion motion in opposition to the insurer. Notably, nonetheless, the insurer’s failure to tender inside 90 days does add an extra 90 days to any relevant statute of limitations.
- In circumstances involving a number of competing claims in opposition to insureds, an insurer may keep away from unhealthy religion publicity by (a) submitting an interpleader motion to find out the claimants’ prorated share of the coverage limits or (b) coming into right into a binding arbitration “agreed to by the insurer and the third-party claimants” the place a “certified arbitrator” determines the claimants’ prorated share of the coverage limits. This transformation raises moral and due course of issues as a result of the insurer chooses and pays for the arbitrator.
Florida policyholders ought to seek the advice of with and retain skilled protection counsel to evaluation insurance policies and advise on technique for the litigation of protection and unhealthy religion claims in mild of those statutory modifications. Hunton’s insurance coverage protection staff has 28 full-time insurance coverage protection attorneys with 9 licensed in Florida. For added updates and insurance coverage protection information, please go to the Hunton Insurance coverage Restoration Weblog.
