Today, the American Consumer Institute (ACI) released a new study exposing the perverse incentives driving financial instability in Florida’s homeowner insurance market. The state’s generous fee-shifting policy has allowed attorneys to collect disproportionate attorney fees in assignment of benefit (AOB) lawsuits, encouraging more costly lawsuits. Today, Florida accounts for nearly 80% of the country’s insurance lawsuits.
These market conditions harm consumers by forcing them to pay exorbitant premiums to insure their property – doubling in just the last three years and running $2,600 more than the national average. While Florida’s legislature has attempted to address these concerns, attorneys have already found new ways to circumvent legislative protections, further driving up profits and consumer prices. As a result, Florida’s governor, Ron DeSantis, has called for a special legislative session to address these problems.
Homeowners in Florida shouldn’t lose hope. In its new study, ACI offers key recommendations that would attack litigiousness, close loopholes and protect consumers from rapidly increasing insurance premiums.
ACI urges the Florida legislature to end or restrict the state’s one-way attorney fee statute. ACI also encourages legislators to close off attorneys’ next avenue for fee-shifting by prohibiting AOB vendors in first-party claim matters from filing Civil Remedy Notices against insurers. These reforms will effectively tackle Florida’s litigious homeowner insurance environment and its increasing premiums for consumers.
The complete study is available here.
Questions about ACI’s latest study? Email [email protected] to set up a conversation.