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\nAuthor: kerrys<\/p>\n","protected":false},"excerpt":{"rendered":"By Ron Hurtibise According to a new study, \u201crunaway litigation costs\u201d threaten Fla. insurance market stability. In 2016, Fla. property insurers faced 27K lawsuits; in the first 10 months of 2020, it rose to 60K. An average $800 in each Fla. property insurance premium pays for litigation costs. FORT LAUDERDALE, Fla. \u2013 Florida\u2019s home insurance market is \u201cspiraling toward collapse,\u201d a newly released study warns. You can help it avoid that fate by starting to save money to pay a share of your next roof replacement. To reduce financial incentives for lawyers to sue them and prevent consumer rates from skyrocketing further, insurers are pushing for changes to state laws that would include no longer being required to pay the full cost to replace damaged roofs. Lawmakers are debating surprising new data that illustrates the price consumers are paying for rampant insurance litigation. An average of $656 out of each premium paid by Florida\u2019s 6.5 million property insurance customers in 2019 went to legal costs, according to an analysis of the state\u2019s property insurance industry. In 2020, that average cost will be around $800. Of $15 billion that went to litigated claims since 2015 \u2013 claims that resulted in lawsuits \u2013 only 8% was paid out to policyholders, the study found. Plaintiffs\u2019 attorneys got 71%, and insurers spent 21% on defense attorneys. Runaway litigation costs over roof claims and other damage are threatening the stability of not only Florida\u2019s insurance market, but also its real estate marketplace, noted the study by Guy Fraker, a consultant from Bloomington, Illinois, who has advised insurance companies and regulators for the past 15 years. The study, titled Florida\u2019s P&C [Property & Casualty] Insurance Market: Spiraling Toward Collapse,\u201d was commissioned by a political action committee called Floridians for Lawsuit Reform, but Fraker said in an interview that he was given free rein to look at the industry from the perspective of how it\u2019s hurting consumers. He found a combination of well-meaning court rulings and changes in state laws over the years created what he calls a \u201clitigation economy\u201d that provides financial incentives for attorneys to file lawsuits against insurers. \u201cIt\u2019s easy to get trapped in an insurers vs. lawyers mindset,\u201d he said. \u201cBut this is people taking advantage of the rules of the game. Not in a bad way. It\u2019s capitalism.\u201d Fraker said he conducted dozens of interviews with industry officials and analyzed reams of claims and litigation data from public sources and from numerous Florida insurance companies. Among his other findings: Of $12 billion Florida property owners spend each year on property insurance premiums, 35% is \u201ca hidden tax\u201d that covers costs of the additional litigation that occurs in Florida compared to other states. Lawsuits filed against all Florida-based property insurers increased from 27,416 in 2016 to 60,328 over the first 10 months of 2020. A big reason is Florida\u2019s generous system for awarding legal fees, often giving attorneys an incentive to file multiple lawsuits over damage to different areas of a single home. Combined, Florida-based property insurers posted $929 million in net losses over the first three quarters of 2020. It will be the fifth-straight year of multimillion-dollar losses for the industry.\u201d Insurance costs have been steadily rising in Florida since Hurricane Irma struck in 2017. Over the past year, homeowners have seen their bills climb by up to 40% as insurers pass along the costs of settling ever-increasing numbers of lawsuits. If those costs are allowed to continue growing, the price of insurance could make the monthly cost of homeownership so expensive that fewer and fewer people will be qualified financially to buy a home, Fraker said. If that happens, home values in Florida could stop appreciating or even decline, creating havoc in the real estate industry, he said. Proposals filed in the state Senate in advance of the spring legislative session are focused primarily on removing financial incentives for attorneys to sue insurers. But they would affect homeowners by reducing what insurers would pay out for roof damage, providing less time for policyholders to report those losses, imposing a waiting period before they can sue over disputed claims, and reducing potential financial rewards that would induce attorneys to represent them. A Senate bill that includes the proposals below was advanced out of the Banking and Insurance Committee and must still be debated by two other committees before it can get to the full Senate after March 1. A similar bill in the House still faces scrutiny by three committees. Lawmakers said they expect revisions as discussions proceed. Those proposals are: Roof replacement Currently, if more than 25% of a roof is damaged in a storm or other covered event, Florida\u2019s Building Code requires replacement of the entire roof. Insurers must pay for the replacement, minus any deductible. Insurers say this has been abused by roofing contractors who canvass neighborhoods and offer incentives to homeowners who let them inspect their roofs. Under the proposal, full replacement coverage would be limited to roofs less than 10 years old. For roofs 10 and older, policyholders would receive between 25% and 70% of the replacement cost, depending on the type of roof, minus their deductible. They would have to pay the remaining replacement cost out of their own pocket. Sen. Jim Boyd, the bill\u2019s sponsor, said policyholders with older roofs might have to \u201cput a couple hundred dollars a year away\u201d to be able to afford a new roof if theirs gets damaged and must be replaced. \u201cI get it that consumers think [roof replacement] should happen because it\u2019s been happening,\u201d Boyd said in a recent Senate Banking and Insurance Committee meeting. \u201cBut it\u2019s gotten to the point where we have to take action to protect the insurance market.\u201d Insurers could still sell full roof replacement coverage to consumers if they wanted to, but currently the bill does not require them to offer the option. The bill would require policies to spell out in large type that consumers are buying less than full roof coverage.<\/p>\n","protected":false},"author":4,"featured_media":4729,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/posts\/4728"}],"collection":[{"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/comments?post=4728"}],"version-history":[{"count":0,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/posts\/4728\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/media\/4729"}],"wp:attachment":[{"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/media?parent=4728"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/categories?post=4728"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/tags?post=4728"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}