As of December 16, 2022, Florida Governor Ron DeSantis signed Senate Bill 2-A (S.B. 2-A), ushering in substantial reforms impacting both contractors and the insurance claims process. This legislative update outlines key provisions of S.B. 2-A, emphasizing its effects on assignment-of-benefits agreements, claim requirements, deadlines, attorney fees, and more. Stay informed about these changes to ensure compliance and understand their implications for your business.
I. Assignment of Benefits (AOB) – Section 627.7152 (Effective January 1, 2023):
S.B. 2-A prohibits policyholders from assigning post-loss insurance benefits under residential or commercial property insurance policies. Any attempts to assign such benefits are deemed void, invalid, and unenforceable. Contractors relying on insurance payments should be mindful of these restrictions, effective from January 1, 2023.
II. Claim Requirements and Deadlines for Insurers – Section 627.70131 (Effective March 1, 2023):
Insurers face revised duties under S.B. 2-A, impacting the timeframes for reviewing and acknowledging communications, initiating investigations, conducting property inspections, and providing detailed loss estimates to policyholders. Compliance with these adjusted deadlines is essential for insurers to navigate the new statutory landscape.
III. Claim Deadlines for Insureds – Section 627.70132:
Insureds must adhere to specific deadlines for notifying insurers about claims or reopened claims. Failure to comply within one year or 18 months, depending on the claim type, may result in claims being barred. Contractors and policyholders alike should be aware of these timelines to ensure timely claims processing.
IV. Attorney Fees – Sections 626.9373(1) and 627.428:
S.B. 2-A introduces changes to attorney fees for both surplus lines carriers and admitted carriers. Under the new legislation, insureds no longer have the right to attorneys’ fees in suits arising from residential or commercial property insurance policies, impacting policies executed on or after the effective date of the Act.
V. Civil Remedy Actions Against Property Insurers – Section 624.1551:
Claimants seeking extracontractual damages must now establish, through an adverse adjudication, that the insurer breached the policy before pursuing legal action. Acceptance of an offer of judgment or an appraisal award does not independently give rise to a cause of action, introducing a new layer to civil remedy actions.
VI. Mandatory Binding Arbitration Endorsements – Section 627.70154:
Insurance policies may now include mandatory binding arbitration requirements under specific conditions. Contractors and policyholders should be aware of the criteria for mandatory arbitration, including the notice of rights relinquished and the availability of non-arbitration policies from insurers.
VII. Offers of Judgment – Section 768.79:
For breach of contract actions, property insurers can now make joint offers of judgment conditioned upon the mutual acceptance of all involved parties. This provision offers insurers a strategic approach to resolving legal disputes.
The comprehensive changes introduced by S.B. 2-A demand heightened awareness and adaptability from contractors, insurers, and policyholders alike. As the legislative landscape evolves, staying informed about these reforms, their effective dates, and potential implications is crucial. For personalized guidance on navigating these changes, consult with legal professionals familiar with Florida’s dynamic regulatory environment.
Stay ahead of the curve, understand the nuances of S.B. 2-A, and ensure compliance with the latest legislative updates. As public adjusters, we keep up to date on current and possible future legislative changes.