Hemorrhaging losses, Florida’s property insurance industry has finally convinced the state Legislature to abolish practices it blames for skyrocketing premiums, carrier failures and plummeting availability of private-market coverage.
But while insurers and Republican legislators say the reforms enacted last week will stabilize the private insurance market — and maybe one day reduce premiums — for consumers down the road, advocates for policyholders contend that homeowners are paying a steep price. Policyholders, they say, are losing leverage they have long held to force insurers to settle claims fairly.
The reforms will likely accomplish insurers’ goals of reducing litigation because fewer attorneys will be willing to take on smaller cases, says Paul Handerhan, president of the Federal Association for Insurance Reform, a consumer-oriented watchdog group. “I expect to see a lot of attorneys exiting the market,” he said, “because it will be more difficult for them to get attorneys fees and when they do, the fees will be less.”
