TALLAHASSEE, Fla. – More than two years after the Legislature clamped down on lawsuits against property insurance companies, a House panel Thursday reopened a major debate about attorney fees when homeowners and insurers battle over claims.
The House Civil Justice & Claims Subcommittee voted 16-1 to approve a bill (HB 1551) that would revamp a 2022 law that shielded property insurers from paying customers’ attorney fees. The insurance industry argues the law has reduced costly litigation and helped revive the market after financial troubles.
But supporters of Thursday’s bill said the 2022 law was tilted too far toward insurers and led to homeowners being unable to fight companies over wrongfully denied claims.
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“At some point, we as a Legislature have got to make sure that we’re standing up for the people of Florida and maybe not the insurance companies of Florida,” said Rep. Michele Rayner, D-St. Petersburg.
Opponents of the bill, however, said the law has worked in helping attract carriers to Florida and holding down rates. They warned that the bill would undo the progress.
“Kudos to you. It (the law) is working,” Katelyn Ferry, who represented the business-backed Florida Justice Reform Institute, told the House panel. “Why are we fixing it?”
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Attorney fees have long been a major battleground in insurance debates. Before the 2022 law, Florida had what is often described as a “one-way” attorney fee system for property insurance. Essentially, that meant If a policyholder successfully sued an insurer over a wrongfully denied claim, the insurer would be responsible for paying the policyholder’s attorney fees.
Supporters of the fee system said it ensured consumers would be able to go to court to challenge deep-pocketed insurers. But opponents said it provided an incentive for plaintiffs’ attorneys to flood the courts with lawsuits and drained money from the industry.
With carriers dropping large numbers of policies, increasing rates and, in some cases, going insolvent, lawmakers in 2022 eliminated the one-way fee system for property insurance. They followed in 2023 by passing legal changes that more broadly helped insurers.
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The insurance industry and other supporters of eliminating one-way attorney fees, including Gov. Ron DeSantis, argue the change has helped the property insurance market bounce back.
The House bill would shift to what sponsor Hillary Cassel, R-Dania Beach, described as a “loser pays” fee system. If a policyholder sues an insurer, the judge would award attorney fees to whichever side prevails in the case.
Cassel said the approach would provide an incentive to settle disputes while restoring “balance.”
“This bill does not bring us backward,” said Cassel, an attorney who represents consumers in cases against insurance companies. “But this bill does bring us balance. We are currently in an unbalanced, unjust system.”
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The bill drew support from groups such as the Florida Justice Association, which represents plaintiffs’ attorneys. It faced opposition from groups such as Associated Industries of Florida, the Florida Chamber of Commerce, the Florida Insurance Council and the Personal Insurance Federation of Florida, which represents national insurers.
“We believe this bill points us back in the direction of less options and a more unstable market by being less focused on the true needs of policyholders, whether they be homeowners or businesses, and more focused on the needs of the lawyers,” Associated Industries of Florida lobbyist Adam Basford said.
Rep. Susan Plasencia, R-Orlando, cast the dissenting vote Thursday. The bill would need to clear two more House panels before it could go to the full House. Sen. Jonathan Martin, R-Fort Myers, has filed a similar bill (SB 426) in the Senate.
