Regarding Florida’s insurance crisis and the recent decision by Farmers Homeowners Insurance pulling out of Florida: The whole limit on lawsuits passed by the Legislature and signed by the governor has to be understood in the light of Ron DeSantis’ run for president.
When DeSantis decided to run for president and sized up his main opposition, he clearly determined that his best chance was to not let Donald Trump run to the right of him on any issue. The governor’s cronies in the Florida Legislature accommodated his political maneuvers. From a virtual ban on abortions, to permitless carry of guns, to even tinkering with the death penalty, look what passed in 2023. So DeSantis got his “going away present” to take to Iowa, New Hampshire and South Carolina.
Part of the gift was a nice lawsuit “reform” package. Good for insurance companies, who like to contribute to presidential races, and good for conservative GOP voters in the early primaries. These laws were not so good for the most needy in the insurance equation — injured victims and damaged homeowners. This removal of some of the essential rights of policyholders was done by the Legislature in whirlwind fashion.
Normally, bills that have such a significant impact proceed through a legislative session with caution. But not here. First, the homeowners insurance bill passed in a special session in late December 2022 called by the governor. The House and Senate passed the bill during a 48-hour tornado less than a week after it was introduced. Public testimony in some committees was limited to a minute. On the day of the vote, Republican leaders limited Democrats’ total debate to 80 minutes.
Such draconian relinquishment of homeowners’ rights should get something in return from the industry. Again, not here. Instead, Democratic amendments pushing for insurance rate freezes, consumer subsidies and other matters were defeated along party-line votes.
The tort lawsuit limitation bills that came in the regular session in 2023 were a race to the finish line too. Was there pre-filing of the bills long before the session, so people could prepare? No. Were there multiple committees that investigated and took testimony? No. These bills called for radical changes. Typically, changes like this take two or three years to pass.
For over 50 years, cases against most defendants in insurance claims had a statute of limitations of four years.
In 43 years as an attorney, I never heard one person complain about this — not the insurance industry, not lawyers for the defense, not lawyers for the plaintiffs, not businesses. But the Legislature cut the statute of limitations in half to two years. That sounds good for someone wanting to brag about taking a “stand” on lawsuits, but where’s the research as presented through committee testimony? With all my experience in this industry, I couldn’t tell you who a lower statue of limitation helps or hurts. Possibly it serves no purpose whatsoever. Nonetheless, legislators felt they could make this decision by “exploring” it for perhaps two days.
Much more important are the laws that govern insurance “bad faith.” Generally speaking, this requires insurance claims to be resolved at a fair amount in a reasonable amount of time. The legal principle prohibits an insurance company from sitting on a claim forever or offering so little that there’s no alternative but to file a lawsuit.
So, Farmers is pulling out of the homeowners market, while some of its affiliates will still be in the auto insurance market. State Farm stopped writing new homeowner’s policies about seven years ago, but made no changes to its auto insurance business. The crisis that causes companies to stop writing a line of coverage didn’t have to be. The Legislature and the governor could have taken the time to study the big picture of insurance. Maybe, the passage of laws that help insurance companies need to come with requirements that those insurance companies write segments of the business that they don’t want to write.
I don’t know if that’s the answer, but the not knowing is the point. I’ve been in this a long time, and I wouldn’t know quite what to do without hearing from experts. I do know it would take a long course of study. It seems that our Legislature didn’t want to study this issue or the many issues they addressed in 2023. They only studied the presidential primary calendar.
David Singer has been a trial attorney for 43 years and currently serves as vice chair of board of governors of Nova Southeastern University’s Shepard Broad College of Law. He lives in Hollywood.
