Senate Bill 2A is an important piece of legislation that brings greater protection and fairness to property owners in Florida.
This bill shortens the amount of time policyholders have to report a claim, prohibits assignment of benefit contracts, and reforms insurance lawsuits – all providing more rights and freedoms for homeowners when it comes to their property insurance.
These measures help ensure that people are able to get reimbursed for damages quickly without worrying about being taken advantage of or having to pay out large attorney fees if they choose to sue an insurance company down the line.
The Short Version:
- Senate Bill 2A was passed by the Florida Legislature on December 12, 2022 and makes some major changes to property insurance policies.
- It shortens the claim filing deadline from two years to one year for new or reopened claims and from three years to 18 months for supplemental claims.
- The bill also prohibits contractors from using Assignment of Benefit (AOB) contracts which had been used previously in order to transfer a claim away from policyholders without their involvement.
- The bill reforms insurance lawsuits by making the individual pay their own attorney fees, regardless of whether they win or not.
- The bill protects insurers’ solvency when there is a large event with many settlements all at once, which is good for both insurance companies and policy holders.
To review the bill in its entirety, visit https://flsenate.gov/Session/Bill/2022A/2A/BillText/Filed/PDF.
All in all, Senate Bill 2A stands as an important milestone in strengthening property insurance policies for the people of Florida.
“I think it was needed,” says insurance agent Matt Pendleton, “[the] biggest benefit is it eliminates the Assignment of Benefits.”
Overall, Senate Bill 2A is a significant piece of legislation that brings more protection and fairness to property owners in Florida. It’s important for homeowners to be aware of the changes when filing claims and making sure they are properly covered by their insurance policy.
There are 3 main points that you need to be aware of:
1. Senate Bill 2A shortens the amount of time policyholders have to report a claim.
Senate Bill 2A has reduced the amount of time policyholders have to report a claim, making it easier for them to seek redress if an event occurs. The claim filing deadline has been shortened from two years to one year for new or reopened claims and from three years to 18 months for supplemental claims.
Companies are reporting that many of these late filing of claims can be fraudulent and can make them vulnerable to paying out more claims than necessary, leading to increased premiums for policy holders down the line. As such, this bill is a way forward in helping ensure timely filing as well as stops fraudulent claim costs from being passed on to policy holders.
2. Senate Bill 2A prohibits assignment of benefit (AOB) contracts.
To protect policy holders, this bill legally prohibits contractors from using assignment of benefit (AOB) contracts.
Before the bill, many contractors had been using AOB’s to get homeowners to sign away their rights and transfer the claim to them instead. This allowed the contractor to sue insurance companies directly without the policy holder needing to be involved, causing a wave of property lawsuit filings in Florida that was far higher than other states witnessed.
With this law in place, policy holders are now much better protected and able to preserve their own legal rights when making insurance claims.
3. Senate Bill 2A reforms insurance lawsuits.
Before Senate Bill 2A, if someone won a lawsuit against an insurance company, the company had to pay for their attorney fees. This created potential for problems for the insurance industry, especially when there were large events with a lot of settlements all at once – like during hurricane season. With such a large payout, it made it difficult to keep solvency in those cases. Now that the bill has passed, however, individuals must pay their own attorney fees regardless of whether they win the case or not; this is often a deterrent from individuals suing their insurance company which helps the industry maintain its solvency.
Other Things Senate Bill 2A Does…
- Establishes the Florida Optional Reinsurance Assistance (FORA) Program for the 2023 hurricane season, providing optional hurricane reinsurance that insurance companies can purchase at reasonable/near market rates.
- Enhances Office of Insurance Regulation’s ability to conduct market conduct exams of property insurance companies following a hurricane, including examinations of Managing General Agents.
- Appropriates funds for OIR staff salaries to recruit and retain staff, filling currently empty positions.
- Gives OIR authority to discipline insurance companies for abuse of appraisal process; review forms and suspend use up to two years; identify abusers on website.
- Authorizes extension of 30-day coverage period by an additional 15 days if policies cannot be placed with authorized company within time frame given current conditions in the marketplace .
- Requires flood notice as part declaration page in policy & encourages policyholders to buy flood protection coverage.
What This Means for You
Overall, Senate Bill 2A is a major step forward in providing Florida homeowners with better protection when it comes to their property insurance. It provides policyholders with more rights and freedoms by shortening the claim filing deadline, prohibiting assignment of benefit contracts, and reforming insurance lawsuits.
These changes will help ensure that people are able to get reimbursed for damages quickly without worrying about being taken advantage of or having to pay out large attorney fees if they choose to sue an insurance company down the line. With this new law in place, Floridians can feel reassured knowing that their properties have been safeguarded from potential fraudulent claims costs as well as timely reimbursements should an event occur.