TALLAHASSEE, Fla. — With a special session on the horizon to address ongoing issues in the property insurance market, we’re looking into what’s driving your rates up.
Mark Friedlander from the Insurance Information Institutes says, it’s partially because Florida has a system in place that allows attorneys to make bank — whether they win or lose.
“There’s a small, select group of Florida’s attorneys that is crossing the line,” he said. “They are taking advantage of the loopholes in Florida’s system.”
Friedlander says if someone files a lawsuit for a claim against a property insurance company, the insurance company has to pay for the plaintiff’s attorney whether they win or lose the case. He says those costs eventually make their way to your rates.
“Whether you are one of the policyholders that has sued your insurer, doesn’t matter,” he said. “You are going to pay for litigation.”
Friedlander tells us some attorneys take advantage of this system by taking on just about every case they come across because they know they’ll get paid either way.
“There have been cases where an insurance company was sued over 87 cents because the claim payment was calculated wrong,” he said. “The trial attorneys filed suit against this insurance company and racked up thousands and thousands of dollars of bills that the insurance company was on the hook to pay.”
CBS Miami reported that Amy Boggs, chairwoman of the Florida Justice Association's Property Insurance Section, criticized the legislative focus on restricting lawsuits, saying such moves would hurt consumers.
"Litigation isn't the problem --- it's the scapegoat," Boggs said in a statement obtained by CBS Miami Tuesday.
"Behind every lawsuit is a homeowner or business owner who has been underpaid or wrongfully denied coverage."
Friedlander says there are also problems with scheming contractors driving up your costs.
He says they tell you something is wrong with your home, and then ask you to sign paperwork that gives them legal access.
“You, the homeowner, are now turning over your claims rights to the contractor and they can do whatever they want with that,” Friedlander said. “They can file a suit on your behalf without your consent.”
Friedlander says issues with re-insurance are also driving up rates for policyholders in Florida.
The special session is slated to begin on Monday, Dec. 12.