Entrepreneur group sues to stop new property insurance law

Five days after the Governor. Ron DeSantis sign SB 2Dthe measure to stabilize Florida’s struggling property insurance market, a lawsuit was filed against it in the Leon County Circuit Court.

The Restoration Association of Florida, a trade group for contractors, sued the state tuesday. The organization is asking the court to strike down the new law because it treats entrepreneurs differently from other citizens and denies them access to the courts.

A provision in the law eliminates attorney fees for cases involving assignment of benefits, or AOB, when a homeowner signs the benefit of an insurance policy to a contractor who then pursues the claim with the insurer . The fees remain intact for the owners’ lawyers.

The lawsuit alleges that this provision violates the Equal Protection Clause of the US and Florida constitutions, and that by waiving these fees, it is nearly impossible to find attorneys to represent them in a dispute with an insurer.

“Most of the claims that contractors submit to insurers under AOBs are for relatively small sums of money,” the RAF chairman said. Richie Kidwell said in a published statement. “But when insurers delay, underpay or refuse payment of valid claims, these companies have little choice but to sue them. By denying subcontractors the right to recover attorneys’ fees reasonable, the new law makes it economically impossible for subcontractors to pursue legal remedies in court and gives insurers even more incentive payments.

Kidwell spoke against the bill last week during House and Senate committee hearings during the special session of the Legislative Assembly, called by DeSantis to address a beleaguered property insurance market bankruptcies, cancellations and skyrocketing rates.

Secretary of the Business and Professional Regulation Department Melanie Griffin and Donald Shaw, executive director of the Construction Industry Licensing Council, are named in the lawsuit. They run the agencies that regulate professions involved in home repairs, such as roofing and mold restoration.

The lawsuit also claims that the entire law should be struck down because it violates Florida’s constitutional prohibition against multiple subjects in a single piece of legislation. The bill is related to property insurance, but contains several provisions in a wide range of areas under this heading, including reinsurance, new parameters for regulators and a mitigation program for owners.

But most of the 29-page lawsuits take aim at the provision eliminating attorney fees for AOB lawsuits.

“There is no rational basis, let alone a compelling government interest, to justify denying the assignee the right to prevailing party attorneys’ fees,” the lawsuit states. “It will only encourage insurers to continue delaying, underpaying and denying legitimate claims from assignees, resulting in an unfair and inappropriate windfall for recalcitrant and fraudulent insurance practices.”

The RAF lawsuit follows another lawsuit filed earlier this month alleging the insurance commissioner David Altmaier allowed regulators to approve changes to insurance policies that violate state law, including allowing insurers to require disputed claims to avoid court and be mediated.


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