The Florida Legislature recently enacted changes to Florida Statute 627.428 which dealt with recovery of attorneys’ fees when an insured must sue their own insurance company. Senate Bill 76, which became effective on July 1, 2021, enacted various reforms to Florida’s property insurance market. One of the major changes was the enactment of Florida Statute 627.70152 dealing with the requirement to provide a pre-suit notice prior to suing your property insurance carrier and how attorneys’ fees are calculated if you must sue your own insurance company.
Background
When a catastrophe strikes your property in Florida, an insured has an obligation to promptly report the loss to their insurance company. The insurance company, per Florida Statute 627.70131(7)(a), then has 90 days to investigate the loss and make a coverage determination. The insurance company can extend those 90 days if there are conditions beyond their control that prevent them from making a coverage decision.
Prior to the enactment of Florida Statute 627.70152, once a coverage determination was made, the insured could file a lawsuit against their insurance carrier if they disagreed with the coverage determination. For example, if the insurance company denied the claim after the investigation was completed, an insured could seek redress in the courts to overturn that denial. Not anymore.
Current Statutory Framework
Florida Statute 627.70152 now requires the insured to take additional steps before filing a lawsuit against their insurance carrier. Essentially, the insurance company now gets a second chance to meet their policy obligations. Under the new statute, the pre-suit notice requires that the insured state with specificity all of the following:
- That the notice is provided pursuant to this section.
- The alleged acts or omissions of the insurer giving rise to the suit, which may include a denial of coverage.
- If provided by an attorney or other representative, that a copy of the notice was provided to the claimant.
- If the notice is provided following a denial of coverage, an estimate of damages, if known.
- If the notice is provided following acts or omissions by the insurer other than denial of coverage, both of the following:
a. The presuit settlement demand, which must itemize the damages, attorney fees, and costs.
b. The disputed amount.
After the pre-suit notice is received, the insurance company has several options. If the claim is a denial, the insurance company can then accept coverage, deny coverage, or ask for a re-inspection which must occur within 14 business days. If the claim stems from an underpayment of the claim, the insurance company can make a settlement offer, require appraisal or some other method of alternative dispute resolution. Based on the results of the pre-suit notice process, it may be that the insurance company does NOT owe for attorneys’ fees or that it ultimately owes a very small amount of attorneys’ fees even if they are incorrect in their actions.
While the changes to the Florida Statutes present an opportunity for the insurance companies to do the right thing, in our next post, we will detail how insurance companies may actually use the new statutes to further underpay claims without any real recourse by their insured.
Alvarez Law Group
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