Legislator, policy researcher push tort reform to control insurance crisis

A state legislator and an official with the Reason Foundation put much of the blame for what they expect to be skyrocketing property insurance rates on out-of-control litigation.

Sen. Jeff Brandes (R-St. Petersburg) and Adrian Moore, vice president of the nonprofit organization, told Tampa Bay Times bankruptcies, homelessness and insurance rate hikes point to problems for the state’s real estate market.

It’s not just the failures of insurance companies in 2019. Hurricane Irma’s insurance losses near $18 billion while more than $6 billion in losses have been recorded so far from Hurricane Michael a year later in 2018, Brandes and Moore told the Tampa Bay Times. The economic downturn that follows the COVID-19 pandemic and massive unemployment may lead to insurance companies being downgraded.

The senator and public policy researcher said six of Florida’s largest counties can’t get insurance from People’s Trust Insurance Co. The carrier, which has policies with more than 100,000 properties, said it couldn’t offer property owners in those counties policies because "the continued bombardment of lawsuits from lawyers and the increased costs...continuing to drive up our total cost of claims,” Brandes and Moore told the Tampa Bay Times.

Carriers have asked for premium increases from 20 to 60%. To cover increasing financial losses, the Florida Office of Insurance Regulation approved double-digit rate hikes. Homeowners in the state should expect to pay $350 to $700 more a year for their premiums, they told the Tampa Bay Times.

“A leading cause driving the current rate increases is a locust swarm of lawsuits driven by unscrupulous contractors sweeping neighborhoods looking to coerce unsuspecting homeowners into filing claims, whether they’re valid or not,” Moore and Brandes told the Tampa Bay Times.

Florida recorded no major storms in 2019, yet the number of lawsuits against carriers rose by 16.8% from the previous year. In 2020 Florida has three times the property insurance lawsuits compared to the entire year in 2015, they told the newspaper.

“Hundreds of lawsuits, prodded by those who will profit from the litigation, continue to be filed every week for Hurricane Irma, a storm that occurred three years ago,” Brandes and Moore told the Tampa Bay Times.

The state senator and public policy researcher said lawsuits are moving from the south into the Orlando area, with legal ads filling the media for roof and water claims.

Brandes proposed consumer protection legislation to stop bad faith lawsuits, a fee multiplier that they told the Tampa Bay Times massively inflates $500 per billable hour attorney fees and other gamesmanship.

“Without reforms, Floridians face massive insurance rate hikes and insurers simply won’t offer the coverage homeowners need in some regions,” Brandes and Moore told the Tampa Bay Times. “The risks of economic devastation caused by shocking insurance rate hikes are real and Florida lawmakers must work to stop the tidal wave of higher property insurance rates about to hit Florida.”