TALLAHASSEE, Fla. — The American Property Casualty Insurance Association (APCIA) today announced that its Florida priority for 2020 is working with the legislature to implement meaningful reforms that reduce widespread lawsuit abuse and put a stop to dishonest legal tactics, with a primary focus on Florida’s bad faith laws, workers compensation system, and assignment of benefits (AOB) in auto glass repairs. Additionally, APCIA will work to pass legislation that removes the American Law Institute’s (ALI) Restatement of the Law, Liability Insurance’s recognition as an authoritative reference on Florida’s liability insurance law.
Bad Faith Reform
“Florida’s legal climate is one of the worst in the country, and rampant lawsuit abuse fueled by some plaintiffs’ attorneys is dramatically driving up costs for consumers and businesses,” said Logan McFaddin, assistant vice president of state government relations for APCIA. “Reforming Florida’s current bad faith law is the No. 1 priority for APCIA this session, as well as working with lawmakers to reform the workers compensation system and address AOB abuse in auto glass repairs. Consumers’ rights to seek legal action will remain protected, but it is past time to implement reforms that will reduce lawsuit abuse, curb frivolous tactics, and begin to restore fairness to Florida’s legal system.”
Florida’s current bad faith law aims to give policyholders legal recourse against insurers if they have acted unfairly or dishonestly when handling insurance claims. While well-intentioned, Florida’s bad faith law is poorly defined, and plaintiffs’ attorneys abuse the lack of clarity in the law to pursue frivolous claims and lawsuits seeking big dollars against insurers in the community. Even when an insurance company does everything possible to settle a claim efficiently, fairly, and in accordance with the terms of the insurance policy, plaintiffs’ attorneys use calculated and disingenuous legal tactics to deliberately prevent a claim from being settled in order to file a lawsuit. A recent study produced by Milliman, Inc. showed that Florida consumers have paid a steep price for bad faith abuses – a $6.6 billion impact on premium costs alone in 2017.
APCIA supports Senate Bill 924 filed by Senator Jeff Brandes, which contains meaningful reforms to Florida’s bad faith law and ensures policyholders rights are protected. APCIA also supports Senate Bill 1828, filed by Senator Doug Broxson, addressing third party litigation financing which is another critical area of lawsuit abuse in need of reform.
AOB Auto Glass
AOB abuse in auto glass repairs is another example of lawsuit abuse that will continue to skyrocket if left unchecked. AOB auto glass schemes are used by repair vendors and attorneys to make money by filing frivolous lawsuits against auto insurers in the names of policyholders, often without the policyholder knowing. This unscrupulous activity exploits a loophole in Florida law and has resulted in a rise in the number of lawsuits filed – jumping from 397 in 2006 to more than 17,300 in 2018, according to the Florida Department of Financial Services – and it is increasing insurance costs for Florida consumers.
“The Governor and Florida Legislature took steps last session to protect homeowners from AOB property scams, and now lawmakers have an opportunity to bring similar protections to Florida motorists,” continued McFaddin. “APCIA urges Florida lawmakers to put a stop to AOB auto glass abuse during the 2020 Legislative Session.”
Florida’s workers compensation system also needs reforms in order to help control costs while providing quality care to injured workers. A comprehensive solution that gives Floridians the ability to avoid unnecessary litigation and receive the timely benefits they need if injured on the job is critical. APCIA will push for legislation that balances the interests of injured employees and employers seeking predictability in costs.
APCIA will also work to pass legislation that removes the recognition of ALI’s Restatement of the Law, Liability Insurance as an authoritative reference regarding Florida’s liability insurance law. Courts and lawyers trust that ALI’s only agenda is to faithfully restate existing law, but the ALI’s Restatement of the Law, Liability Insurance contains provisions that reflect aspirational views of the law regarding liability insurance. The Restatement of the Law, Liability Insurance, now finalized and published, has already been cited in 30 court decisions.