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Florida Increases Consumer Protections and Insurer Accountability with New Insurance Law

Wednesday, June 21, 2023   /   by Darcy Miller

Florida Increases Consumer Protections and Insurer Accountability with New Insurance Law

Florida has taken a significant step towards enhancing consumer protection and holding insurers accountable with the signing of CS/SB 7052 into law on June 1, 2023. Governor Ron DeSantis's approval of this Act ushers in a range of statutory revisions that fortify policyholder safeguards and introduce stricter regulations for insurance companies.

Effective July 1, 2023, this groundbreaking law aims to empower homeowners, foster competition, and ultimately reduce insurance costs. In this blog post, we will explore the key provisions of the law and how they impact citizens in the Sunshine State.

Enhanced Coverage and Policyholder Rights: One of the most notable changes brought about by the Act is the prohibition on insurers canceling or nonrenewing property insurance policies for residential properties or dwellings that have suffered damage from a covered peril. Under the new law, policies cannot be terminated until either the property has been fully repaired or one year has passed since the insurer issued the final claim payment. Furthermore, the Act expands existing regulations to prevent insurers from canceling or nonrenewing policies until 90 days after repairs are completed for damages caused by hurricanes or wind loss during a state of emergency declared by the Governor.

Additionally, the Act addresses deductibles and ensures that if a roof deductible is applied, no other deductible can be applied to any other loss caused by the same peril. This provision protects policyholders from being burdened with multiple deductibles for different damages resulting from a single event.

Support for Deployed Individuals: Recognizing the unique circumstances faced by individuals deployed to combat zones or combat support systems, the Act extends the period for filing property insurance claims during their term of deployment. This provision offers crucial support to named insured individuals who may be unable to address their claims promptly due to their military service obligations.

Stricter Oversight and Penalties: To enhance insurer accountability and deter misconduct, the Act includes provisions for increased fines imposed by the Office of Insurance Regulation (OIR) on insurers. The maximum administrative fines have been raised by 250% for general violations and a staggering 500% for violations occurring during a state of emergency. The updated fines for non-willful violations range up to $12,500, while fines for willful violations can reach $100,000. Aggregate fines have also been increased to a maximum of $50,000 for non-willful violations and $500,000 for willful violations arising from the same action. Fines related to covered losses or claims caused by emergency situations during a state of emergency have separate limits set at $25,000 and $200,000, respectively.

Claims Handling and Unfair Trade Practices: The Act introduces stringent requirements for residential property insurers, mandating the creation and use of claims-handling manuals that adhere to the Insurance Code and industry standards. Insurers must submit these manuals to the OIR upon request and provide attestation that they comply with Florida law and can be effectively implemented. Moreover, the Act prohibits the alteration or amendment of an adjuster's report without a detailed explanation for any changes that result in reducing the estimate of the loss. It also bars officers and directors of impaired or insolvent insurers from receiving bonuses from the insurer or related entities.

Rate Discounts and Mitigation Efforts: Starting October 1, 2023, insurers are obligated to provide information on their websites regarding hurricane mitigation discounts available to policyholders. This information must be easily accessible through a hyperlink on the insurer's homepage or the primary page for property insurance policyholders in Florida.

 

Miller Team | Castillo Real Estate
Paula Miller
6518 Sherry Lane
St. Augustine, FL 32095
904-833-5859

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