Putting The Power In The People’s Hands

What the Insurer Accountability Act means for Florida’s policyholders

On Behalf of | Jun 15, 2023 | Bad Faith Insurance Claims, Homeowner Claims, Hurricane Damage Claims

Hurricane Ian broke all sorts of records when it made landfall in Florida late last year. Considered the third-costliest weather event on record, it led to $113 billion in damages. Of that total, $109.5 billion was for damages in Florida alone.

Insurance companies operating in the state were expected to help their customers recover from Hurricane Ian’s rampage. However, a damning investigative report by The Washington Post found that insurers were altering damage estimates without the knowledge or permission of claims adjusters and consumers. The report found that carriers had reduced damage estimates by 45% up to 97%.

But last week, Florida Governor Ron DeSantis signed into law Senate Bill 7052. Also known as the Insurer Accountability Act, the new law prevents insurance carriers from changing damage estimates without reporting why they made the alterations. Insurers must also keep a list of their damage estimate edits and all document versions for regulatory purposes.

The new law comes into effect on July 01.

Are insurers committing bad faith by changing damage estimates?

Bad faith insurance refers to any unscrupulous practice an insurance company would do to avoid its contractual obligations to pay policyholders. Bad faith usually comes in the form of misrepresenting contract terms, failure to communicate specific exclusions and taking too long to pay claims.

An insurer altering damage estimates is bad faith because the insurer is trying to avoid paying for the total price of a claim.

Until the new law comes into effect next month, policyholders must be very careful about dealing with their insurers. Suppose they feel that the damage estimates presented by their claims adjuster and insurer are too different or that their insurer is making unreasonable changes. In that case, policyholders should consider taking their carrier to court with the guidance of an attorney.