Homeowners Can't Sue Insurers? ‘Bad Faith’ Bill Troubles Some Senators
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A bill limiting the ability of homeowners to sue insurers moved forward Tuesday in the Senate Judiciary Committee, but will likely see significant changes before making it to the Senate floor.
Senate Bill 1592 barely squeaked through the committee in a 4-3 vote, with Republican Sen. David Simmons of Maitland joined two Democrats in voting against it.
The bill decreases the amount of time a homeowner has to file a claim, and protects insurance companies against lawsuits filed after a claimant has withheld information about the claim. It also limits the parameters for bringing “bad faith” lawsuits, or actions brought after an insurance company has rejected a “good faith” settlement offer within the policy cap.
“The whole purpose of the bill is to encourage settlements and try to do it in a fair and objective manner,” said Sen. John Thrasher, R-St. Augustine, who is sponsoring the bill.
But opponents of the bill raised concerns about how best to address Florida’s "bad faith" lawsuit problem. Simmons accused Thrasher’s bill of overreach.
“I believe this bill goes way beyond the problem it’s intended to solve. It’s like if your friend had a headache and you took a shotgun and said, ‘I can fix it,’” said Simmons, a former trial lawyer.
Consumer advocates warned SB 1592 would compel nearly all claimants to hire lawyers, and those without the means to do so would be left out in the cold. Supporters of the bill pushed back against that claim, saying it would foster more settlements and avoid more trials.
Both sides alternatively claimed that small businesses would be helped or hurt by the bill, but Bill Herrle, Florida executive director of the National Federation of Independent Businesses, said that businesses would benefit from a more solid insurance market.
“They depend on an insurance market to insure them,” Herrle said.
Sen. Ellyn Bogdanoff, R-Fort Lauderdale, who voted for the bill, remained skittish about the support of businesses.
“I have gotten a number of calls from business owners in my community who are concerned with some of the provisions,” Bogdanoff said.
She also questioned why the bill changes the current legal standard for bringing a "bad faith" lawsuit by a claimant.
“There needs to be a difference between the failure to file a claim and bad faith,” said former Florida Supreme Court Chief Justice Charles Wells, who spoke in favor of the bill at the committee.
Despite being moved through the committee, Thrasher’s bill is all but certain to be altered during its next stop in the Budget Committee.
“I don’t know if this version of the bill could make it on the floor of the Senate as it is,” said Sen. Anitere Flores, R-Miami, who voted for the bill.
The House version of the bill is yet to get its first committee hearing.
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