FPCA Homeowners Division: CS/CS/CS/SB 408 Temporarily Postponed in House on Second Reading; Strike-All Filed
May 3, 2011
Florida Property and Casualty Association Homeowners Division Members:
After CS/CS/CS/SB 408 was temporarily postponed by the House on Second Reading today, May 3, 2011, a strike-all amendment was filed to the bill, which is on today’s House Special Order calendar.
Provisions contained within this strike-all amendment are listed below:
- A five-year statute of limitations on property insurance claims running from date of loss
- Florida Hurricane Catastrophe Fund reimbursement details
- Allow surplus note renegotiation
- Capital and surplus requirement
- Public adjuster reforms – limiting payment to 20 percent, advertising restrictions, insurer’s representative must provide 48 hours’ notice
- Three-year notice of windstorm claim filing deadline
- Expedited rate filing for all reinsurance – Amount allowed increased to 15 percent, deletes provisions that state profit load and expenses cannot be included
- Rate filing certification not rendered false if supplemental information was provided
- Specifies that the Florida Public Model must charge private insurers a reasonable cost
- Citizens Property Insurance Corporation (“Citizens”):
- Public Adjusters cannot make more than 10 percent of additional amount paid over original offer by Citizens
- Changes name of Citizens High-Risk Account to “Coastal”
- Surcharges are payable at cancellation or termination of policy
- Outsources certain functions
- Cannot cover appurtenant structures in sinkhole coverage
- Agent must get a signed form that insured is aware of surcharges/assessments
- Conflict of interest provisions for Citizens Board members
- Exempts sinkhole from the 10 percent glide-path
- Reduces time for notice of cancellation to 120 days from 180 (allows Citizens to have 45 days for take outs)
- Cancellations/Nonrenewal at 45 days if OIR determines solvency problems
- Allows changes in coverage by a “Notification of Change in Policy Terms”
- Senate ACV/RCV proposal – ACV on dwelling and offer two types of contents RCV – one with a holdback and one without
- Sinkholes:
- Provides findings and intent – states that this legislation is clarifying
- Must provide Catastrophic Ground Collapse
- Shall make available sinkhole
- Specifically allows for inspections
- May restrict coverage to the principle building
- Defines neutral evaluation and evaluator
- Structural damage defined as:
- Interior floor displacement
- Foundation misplacement
- Leaning/buckling of exterior load bearing walls
- Damage where the building is in imminent danger of collapse
- Damage occurring after October 15, 2005 that qualifies as “substantial structural damage” as defined in the Florida Building Code – provides definitions
- Two-year claims filing deadline from when insured had constructive knowledge of damage (known or should have known)
- Requires insured to pay 50 percent of costs of testing or $2,500, whichever is less – subject to reimbursement if a sinkhole is present
- Repairs must be made pursuant to recommendations made by insurer’s report
- 90 days time limit to commence repairs – tolled if neutral evaluation in invoked
- Repairs must be completed within 12 months, except in certain circumstances
- Rebates prohibited and void coverage
- Requires policyholder to file sinkhole report before payment for sinkhole loss
- After repairs the engineer must file report after completion of repairs
- Clarifies neutral evaluation process
- Clarifies that the insurers is not liable for attorney fees unless policyholder gets a more favorable judgment than what was issued by neutral evaluator
- Prohibits the Florida Insurance Guaranty Association (FIGA) from paying attorneys’ fees or public adjuster fees
- Severability clause
- Effective date is upon becoming law
Should you have any comments or questions, please contact Katie Webb (kwebb@cftlaw.com) at Colodny Fass.
