Two major events that could impact the future of the Florida insurance marketplace took place in early 2017. One event is being discussed in Tallahassee while the other was decided by the State Supreme Court and applies to claims filed by homeowners.

Insurance Reform in the Sunshine State

According to the Florida Chamber of Commerce, insurance regulation is not something that can be reformed in a single legislative session. To this effect, the Chamber will pursue two initiatives in the first session of 2017: controlling workers’ compensation rate increases and reducing the incidence of property insurance fraud.

Concerning workers’ comp insurance, the United States Chamber of Commerce has listed Florida as being a problem state in terms of excessive claims and expensive rates. The Florida Chamber is concerned that state regulators are not doing enough to contain workers’ comp abuse, which is being cited as the reason insurance premiums are rising for employers.

The other issue on the Chamber’s agenda for 2017 is property insurance fraud. Fraud is an unfortunate issue in the realm of Florida homeowner’s insurance; the Chamber believes that regulators pay too much attention to potential claims abuse and do not dedicate enough investigative resources to instances of fraud.

American Home Assurance Co. v. Sebo, 141 So. 3d 195 (Fla. 2d DCA 2013)

This civil case, which was reviewed by the Florida Supreme Court in late 2016, has been a hot topic of conversation for the insurance industry.

In essence, this case favors homeowners who file claims for multiple concurrent losses. The case dates back to 2007, and it cites damages to a Florida property caused by Hurricane Wilma in 2005. The policyholder entered multiple claims for water damage, which the insurance company ended up declining coverage for.

The Supreme Court decision explained that the policy extended to the homeowner should have provided the coverage he demanded, and thus the claims should have been processed. The subject property, in this case, was demolished years ago; however, this case may have a lasting impact on the insurance litigation realm in Florida.

It may be too early to anticipate the reaction to the case as mentioned above; nonetheless, if too many claims and lawsuits are reopened to be litigated, Florida insurance companies may apply more restrictive clauses to their policies. The insurance industry learns lessons like this one on a daily basis, and it always manages to find a way to stay competitive and to cater to the best interests of homeowners and all the other Floridians they choose to insure.

This case is also a lesson for policyholders who feel as if the system is stacked against them. It is important to understand the coverage and all clauses of a policy; if you have questions, be sure to ask your agent. Keep in mind that not all policies are the same; you never have to purchase inadequate coverage as long as your insurance agent is there to explain your options.

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