Three (3) notable changes are coming to the way residential and commercial property insurance claims will be handled in Florida. On December 12, 2022, the Florida Legislature held a Special Session focused on property insurance. Among the many changes are:
- Smaller claim deadlines. The bill amends §627.70132, Fla. Stat. to reduce the deadline for policyholders to report a claim under a policy from 2 years to 1 year for a new or reopened claim, and from 3 years to 18 months for a supplemental claim.
- Elimination of Assignment of Benefits to contractors. The Bill amends §627.7152, Fla. Stat. to prohibit the assignment, in whole or in part, of any post-loss insurance benefit under any residential or commercial property insurance policy issued on or after January 1, 2023. After suffering property damage and filing an insurance claim, it was common for a property owner to assign insurance policy benefits under the existing policy to a contractor. An Assignment of Benefits (“AOB”) effectively puts the contractor in the owner’s shoes, and permitted payments for repairs to be paid directly to the contractor. AOBs also allowed contractors to handle disputes regarding required repairs, or repair costs. This form of AOB is no more.
- Elimination of consumers’ ability to collect their attorneys’ fees. The “one-way” attorney fee provisions of §627.428, §626.9373, and §627.70152, Fla Stat. will no longer be applicable in a suit arising under a residential or commercial property insurance policy. A formerly unique feature of Florida law allowed an insured to recover attorney fees if he or she prevails in a lawsuit against the insurer to enforce an insurance policy – which has been referred to as the “one-way attorney fee” in insurance litigation. As a result, successful lawsuit against an insurer will no longer result in an award of policy benefits, plus an award of attorneys’ fees.
These changes apply to policies made after January 1, 2023.