April 2023

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The Florida Senate has unanimously approved an amended version of the Insurer Accountability Act, removing some reporting requirements for property insurers. The amended bill would continue to bar insurers from altering adjusters’ estimates without detailing the changes.

An earlier version of Senate Bill 7052, filed after a backlash over recent tort-reform and other litigation-limiting laws, would have required insurers to annually report more data about the financial health of the companies and their managing general agencies, dividends paid to a parent company, and the actual cost of services provided by an affiliate.

The new version, approved Wednesday by a vote of 39-0, removes much of that language. Instead, insurers would have to adopt best practices for handling claims, state Sen. Travis Hutson told the Miami Herald. Claims manuals would have to be made available to regulators under the changed bill.

Some insurance industry lobbyists had opposed the bill and the amended version is seen as something of a compromise. Some insurers remain concerned that it could exacerbate reinsurers’ worries about the Florida market.

“With premiums and non-renewals spiking, and at least the perception of questionable claims-handling practices, elected officials are under tremendous public pressure to be seen as holding insurers accountable,” said William Stander, executive director of the Florida Property & Casualty Association. “Unfortunately, this bill will only rejuvenate private capital’s concerns about the viability and trajectory of Florida’s insurance marketplace, and threaten the turnaround promised by passage of 2022’s SB 2A and 2023’s CS/HB 837.”

The state Office of Insurance Regulation would still be required to produce annual and quarterly reports showing its actions to enforce insurer compliance with laws and regulations. Altering adjusters’ reports without providing a detailed explanation would still be considered an unfair claims practice under the amended bill. Carriers would have to provide all adjusters’ estimates and include the adjusters’ identities.

The Senate-passed version also bars impaired or insolvent insurers from soliciting new or renewal insurance risks and bars officers or directors of insolvent insurers from accepting bonuses.

The bill now moves to the House of Representatives, which has one week left in the 2023 regular session to act.

An early version of SB 7052 can be seen here. The amended version is here. The bill would make a number of other changes designed to make insurers’ and regulators actions more transparent and accountable.


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Emergency assessment ordered

Florida is in store for a whopping 76% increase in homeowners insurance premiums in 2023 over last year, insurance regulators approve an emergency assessment on almost all Florida insurance policies to pay for the most recent carrier insolvency, plus signs and warnings that the bad actors who helped ruin Florida’s property insurance market are migrating to Louisiana and Texas.  It’s all in this week’s Property Insurance News digest.

Homeowners Rate Hikes: A new report by the virtual insurance agency Insurify projects Floridians will pay an average of nearly $8,000 in homeowners insurance premiums in 2023, a 76% increase ($3,356) over last year.  Inflation and catastrophic events are partially to blame but rampant fraud and excessive litigation are major contributors to the price hike.  Florida topped the list of predicted highest average annual premiums ($7,788), followed by Oklahoma ($6,853), Louisiana ($5,353), Alabama ($5,102), and Kansas ($5,005).  Hallandale Beach tops the list of most expensive cities for homeowners insurance, with an average annual rate of $12,578.  Three other cities in Florida – Hialeah, Miami, and Lake Worth – follow closely behind.  Nationally, average premiums will increase by 9% (about $150) in 2023, from $1,636 to $1,784, following the 7% increase seen in 2022.

Emergency Assessment: The Florida Office of Insurance Regulation last week ordered a 1% emergency assessment on all property insurance policies across all lines, except automobile.  The order was made necessary by the United Property & Casualty (UPC) insolvency in February.  It pushed the Florida Insurance Guaranty Association’s (FIGA) previous 9,100 pending claims count to more than 24,500 and has added an estimated $550 million to $650 million liability on FIGA.  FIGA, in turn, is floating bonds to fund those claims payouts.  The assessment will begin October 1, 2023 and continue for a year, with automatic renewals after that until the bonds are paid off, expected in 2025.  This assessment will be a pass-through to policyholders.  FIGA will hold a public workshop at a future date to provide insurance companies with information on how to report and remit surcharges.

Louisiana Insurance Commissioner Jim Donelon

Exporting Bad Actors: Louisiana Insurance Commissioner Jim Donelon is warning his state’s legislature that it better follow Florida’s example and pass comprehensive insurance marketplace reforms.  “Because of recent changes in Florida, I expect those bad actors to target Louisiana homeowners next,” Donelon said.  “In fact, we’re already seeing it.”  Donelon is promoting a legislative package which would include stopping the use of AOB contracts and preventing unscrupulous contractors and law firms from being able to file lawsuits on behalf of homeowners.  We’re glad that Florida is leading the way and am sure Commissioner Donelon realizes that such reforms will take 18-24 months to impact insurance rates as we’ve been told. 

Next door in Texas, seasoned insurance lawyer Steve Badger, who has provided keen market insights over the years, posted this on LinkedIn: “If you were a Florida restoration contractor and the Florida legislature had just essentially wiped-out your insurance claim based business model, what would you do?  Apparently….move to Texas.  Rumor has it that some large Florida restoration contractors are packing up shop and moving to Texas – to replicate the same business model they previously used in Florida.  Under this model, they get the homeowner to sign a contract with vague pricing terms, take a small water leak or storm damage claim and turn it into huge restoration project, draft a grossly inflated estimate, create a dispute with the homeowner’s insurance company, place a lien on the home, and then flip the matter to a lawyer.  This should raise a serious concern with both Texas policyholder advocates and Texas insurance industry representatives.”

LMA Newsletter of 4-17-23


Tags: Contractor, Contractor Services, Emergency Assessment, Florida Homeowners Insurance Market, Florida Insurance Guaranty Association, Florida Office of Insurance Regulation, Florida Property Insurance, Insurance Litigation, Insurance Rates, Jim Donelon, Louisiana Insurance, Reinsurance, Roofing, Roofing Solicitation, Steve Badger, Texas Insurance, United Property & Casualty

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Jeffrey Karam, CPCU

Bradenton, FL



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Residents of a South Florida waterfront condominium that was deemed unsafe during a recent inspection have until Tuesday morning to evacuate.

A building engineer conducting an inspection on April 14 for the Majestic Isle condominium’s required 60-year certification found sagging floors and termite damage, North Bay Village officials said. The village is located in Biscayne Bay, along a causeway that connects Miami and Miami Beach. It’s also just a few miles from the town of Surfside, where 98 people died in June 2021 when a 12- story oceanfront building collapsed.

“North Bay Village and the community are stepping up to help displaced residents until they can come back home,” North Bay Village Mayor Brent Latham said in a statement. “We are here for the affected residents for as long as they need us, to help see them through this difficult time.”

A roof drain leak at Majestic Isle, which was built in 1960, caused a partial ceiling collapse earlier this month, prompting the evacuation of five of the three-story building’s 36 units, village officials said in a news release. After receiving the engineering report last week, North Bay Village officials announced that all of the building’s 55 residents would need to leave.

Residents have been able to move light items out of their units over the past week. Officials didn’t have a timeline for when residents would be able to return home or move furniture and bigger items out completely.

Village officials were hosting a meeting Monday evening to discuss the evacuation. The village has also set up a fundraiser to help displaced residents.

A telephone number listed for the condo association was no longer in service.

The Champlain Towers South condo in 2021. (AP Photo/Gerald Herbert, File)

The Surfside disaster drew the largest non-hurricane emergency response in Florida history, including rescue crews from across the U.S. and as far away as Israel to help local teams search for victims.

Other buildings in South Florida have been evacuated amid similar safety concerns since the Surfside collapse. In October, the 14-story Port Royale building on Collins Avenue was ordered evacuated due to concerns over its structural safety.

The disaster focused scrutiny on the structural integrity of aging condominium towers throughout Florida, especially along its coastlines. The state has since moved to strengthen laws requiring inspections and periodic recertification of buildings.

Miami-Dade County had required the first recertification only after 40 years. The Surfside building was undergoing that recertification process when it collapsed.

New state rules signed into law last year require buildings to have their first recertification after 30 years, or 25 if they are within 3 miles (5 kilometers) of the coast, and then every 10 years thereafter.

Copyright 2023 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer.


1.     Insurer Accountability – HB7065/SB 7052

By Rep. Duggan and Sen. Hutson

Last week, the House filed its version of the Insurer Accountability Act, which was introduced as a committee bill by the Commerce Committee. The House bill was placed on the Appropriations Committee agenda, where it passed on April 21 with an amendment that made it closer to the Senate version of the bill. The House bill will now head to the floor. The Senate bill passed its last committee, Fiscal Policy, on April 20. The big differences between the versions: the House version does not contain bad faith language (section 19 of the Senate Bill) or the same version of the Managing General Agent (“MGA”) language. 

Regarding insurance coverage the proposed bill:

·        Prohibits authorized and surplus lines insurers from cancelling a property insurance policy during any pending claim until after repairs are complete;

·        Requires that Citizens cover property with open claims that are being handled by FIGA (Florida Insurance Guaranty Association);

·        Prohibits the Office of Insurance Regulation (OIR) from waiving its review of policy forms for 3 years for any insurer that has violated the Insurance Code;

·        Provides that the prohibition on applying any other deductible under the policy if a roof deductible is applied encompasses any other loss to the property caused by the same covered peril.

·        Tolls the time period for filing a property insurance claim during an insured’s active duty military service; and

·        Clarifies legislative intent that Chapter 2022-271, Laws of Florida, passed during Special Session A in December 2023, (SB 2-A [2022] on Property Insurance) shall not be construed to impair any right under an insurance contract in effect on or before the effective date of that chapter law (December 16, 2022).

·        Clarifies that the provisions of do not impair rights under policies in effect before the act’s effective date.

Regarding rates charged for insurance, the proposed bill:

·        Requires that property insurance and motor vehicle rate filings must include, and the OIR must consider in reviewing rates, the combined effect of recent legislative reforms;

  • Appropriates $500,000 from the Insurance Regulatory Trust Fund for OIR to obtain an actuarial study to implement this requirement.

·        Requires that property insurance mitigation discounts be updated at least every 5 years and insurers to provide consumer-friendly information on their website describing hurricane mitigation discounts available to policyholders; and

·        Makes title insurance rates subject to OIR rate review.

Regarding insurer claims handling, the proposed bill:

·        Requires OIR to ensure liability insurers are complying with proper claims handling practices by following specified best practices

·        Creates a 60-day prompt-pay law for non-PIP motor vehicle insurance claims similar to the prompt pay law for residential property insurance claims;

·        Requires insurers to annually submit their claims manuals to the OIR and attest that the manual comports to usual and customary industry claims handling practices, which is a concern given there is no separate bill creating a specific public records exemption; and

·        Strengthens the Unfair Insurance Trade Practices Act by:

  • Prohibiting altering or amending an adjuster’s report without including a list of changes, who made the change, and an explanation of a change that reduces coverage; and
  • Prohibiting payment of bonuses to officers and directors while an insurer is impaired or insolvent.

Regarding regulatory oversight of insurers, the bill:

·        Increases maximum administrative fines by 250 percent generally, and 500 percent for violations stemming from a state of emergency such as a hurricane.

·        Requires insurers to more promptly respond to the Department of Financial Services (DFS) Division of Consumer Services and increases fines for noncompliance.

·        Provides additional funding for the DFS Division of Consumer Services.

  • Appropriates five positions with associated salary rate of 325,000 and the sum of $494,774 in recurring funds and $23,410 in non-recurring funds to the DFS from the Insurance Regulatory Trust Fund.

·        Specifies objective criteria to be used by OIR to:

  • Prioritize necessary financial and market conduct examinations.
  • Determine when payments to affiliates are excessive.

·        Provides conditions whereby the OIR must initiate a market conduct examination.

·        Requires insurers to report to the OIR any temporary suspension of writing new policies.

·        Applies the standard order that OIR issues to protect consumers after hurricanes to surplus lines insurers.

·        Specifies that insurance fraud referrals may be made to the statewide prosecutor for crimes that impact two or more judicial circuits.

·        Requires additional reporting from regulators regarding their enforcement actions.

2.     Condominium and Cooperative Associations – HB 1395/SB 154

By Rep. Lopez and Senator Bradley

This is a cleanup package for the Surfside bill that passed in special session last May. The House bill has passed all three of its committees of reference. The House bill passed its last committee, the Commerce Committee, and is ready to head to the floor. The Senate bill passed the Senate by 40-0 and was immediately certified on 04/12. SB 154 is now in route for the House where it will be considered.

SB 154 revises the milestone inspection requirements for condominium and cooperative buildings that are three or more stories in height to:

·        Limit the milestone inspection requirements to buildings that include a residential condominium or cooperative;

·        Provide that the milestone inspection requirements apply to buildings that in whole or in part are subject to the condominium or cooperative forms of ownership, such as mixed-use buildings;

·        Clarify that all owners of a mixed-use building in which portions of the building are subject to the condominium or cooperative form of ownership are responsible for ensuring compliance and must share the costs of the inspection;

·        Delete the 25-year milestone inspection requirements for buildings that are within three miles of the coastline;

·        Authorize the local enforcement agencies that are responsible with enforcing the milestone inspection requirements the option to set a 25-year inspection requirement if justified by local environmental conditions, including proximity to seawater;

·        Authorize the local enforcement agency to extend the inspection deadline for a building upon a petition showing good cause that the owner or owners of the building have entered a contract with an architect or engineer to perform the milestone inspection services and the milestone inspection cannot reasonably be completed before the deadline;

·        Provide that the inspection services may be provided by a team of design professionals with an architect or engineer acting as a registered design professional in responsible charge; and

·        Clarify that an association must distribute a copy of the summary of the inspection reports to unit owners within 30 days of its receipt.

Requires the Florida Building Commission to establish by rule a building safety program to implement the milestone inspection requirements within the Florida Building Code. The commission must specify the minimum requirements for the commission’s building safety program by December 31, 2024, including inspection criteria, testing protocols, standardized inspection and reporting forms that are adaptable to an electronic format, and record maintenance requirements for the local authority having jurisdiction.

Revises the requirement that all personal lines residential policies issued by the Citizens Property Insurance Corporation must include flood coverage to exempt condominium or cooperative units that are in certain flood-risk areas and above specified floors in a building.

Clarifies that both the condominium or cooperative unit owner and any person authorized by any owner as his or her representative may inspect the official records of the association.

The bill provides additional presale notice requirements in contracts for sales of a unit by a developer or nondeveloper. This provision is similar to current contract notices to unit owners obligated to furnish certain governing documents to the prospective buyer of a unit more than three days before closing for sales by a nondeveloper or 15 days before closing for sales by a developer. A contract that does not conform to these notice requirements is voidable at the option of the purchaser prior to closing.

3.     Collateral Protection Insurance on Real Property HB 793/SB 410

By Rep. Fernandez-Barquin and Sen. Garcia (I)

This is the first time this type of language has been introduced in Florida. The House and Senate bills have received three committees of reference. SB 410 has passed two committees and is now on its last committee’s agenda for April 25th. The House version has passed all of its committees and has been placed on the Calendar for its second reading.

The bill creates a new section of law dealing with real property collateral protection insurance, also known as “forced-placed” insurance. The bill seeks to promote the public welfare by regulating collateral protection insurance on real property, create a legal framework which collateral protection insurance on real property may be written in the state, help maintain the separation between mortgage lenders or servicers, and insurers or insurance agents, and minimize the possibilities of unfair competitive practices in the sale, placement, solicitation, and negotiation of collateral protection insurance.

The scope of the bill applies to insurers and insurance agents engaged in any transaction involving collateral protection insurance on real property and all collateral protection insurance written in connection with mortgaged real property, including manufactured and mobile homes.

4.     Insurance HB 505/SB 418

By Rep. Berfield and Sen. Perry

This bill has turned into the Insurance Omnibus bill for the 2023 Legislative Session. As usual for every session the House and Senate versions will move through the process picking up smaller industry specific language and turning the bill into a train. HB 505 passed its last committee, the Commerce Committee, and will be placed on the second reading calendar. SB 418 has passed the Senate with a vote of 39-0 and is now in Messages towards the House.

The Senate bill is ahead of the House version and has the following provisions:

·        Allows a residential property insurer’s rate filing to estimate projected hurricane losses by using a weighted or straight average of two or more models approved by the Florida Commission on Hurricane Loss Projection Methodology.

·        Provides that, in lieu of themselves, the Executive Director of the Citizens Property Insurance Corporation, and the Director of the Division of Emergency Management, respectively, may appoint a designee to be a member of the Commission on Hurricane Loss Projection Methodology.

·        Authorizes an insurer to file a personal lines residential property insurance rating plan that provides premium discounts, credits, and other rate differentials based on windstorm construction standards developed by an independent, not-for-profit, scientific research organization.

·        Limits the requirement that an insurer provide a policyholder who has an automatic bank withdrawal agreement with the insurer with 15 days advance written notice of any increase in policy premiums. Instead, notice will only be required for premium increases that result in an increase in the automatic withdrawal of more than $10 from the previous withdrawal amount.

·        Revises provisions regarding the delivery of a policy to a policyholder by expanding the type of policies authorized to be delivered by electronic transmission to include individual and group health insurance policies, including dental.

·        Revises the mandated deductibles that must be offered for hurricane loss when issuing a personal lines residential property insurance policy. For policies with a dwelling limit of at least $1 million, the bill no longer requires the offer of the current mandated deductibles of 2 percent, 5 percent, and ten percent of the dwelling limit. Instead, the bill provides that an insurer may offer deductibles of up to:

  • Ten percent, for a policy covering a risk with dwelling limits of at least $1 million, but less than $3 million;
  • Fifteen percent, for a policy covering a risk with dwelling limits greater than $3 million.

·        Revises the requirement that the waiver by a policyholder of windstorm coverage or contents coverage, must be in the policy holder’s own handwriting, by also allowing the waiver to be typed.

·        Eliminates the requirement that a notice be stamped on the declarations page of limited coverage automobile policies. Such policies generally cover antique motor vehicles.

5.     Hurricane Protection for Condominium Association (Mitigation Credits)

HB 395/SB 556 By Rep. Tuck and Sen. Hooper


Both House and Senate bills have received three committee references. The Senate bill has cleared its second of three committees by a vote of 7-0. The House bill has not moved and technically may be dead for the session.

Adds in the definition section of condominium a term “hurricane protection” which covers hurricane shutters, impact glass, code-compliant windows or doors and other code-compliant hurricane protection products in order to potentially earn insurance mitigation credits. 

The bill allows for condominium associations to let members vote and by a simple majority require unit owners to install hurricane protection that complies with or exceeds the applicable building code. 

Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer.

Florida Gov. Ron DeSantis asked the Biden administration on Saturday to declare Broward County a disaster area due to flooding earlier this month after record rainfall. The flooding, from record rainfall, was so great that it will likely force Fort Lauderdale to find a new home for city hall.

If the federal disaster declaration is granted, the declaration would make Broward residents who incurred damage to their homes and other property eligible for a wide range of loans and other assistance. Local governments would also be eligible.

The flooding also closed the airport for almost two days. Gas deliveries to the port were also slowed, causing long lines at the pump.

Fort Lauderdale City Hall in better days. (City of Fort Lauderdale)

The Republican governor is expected to soon announce that he will seek his party’s nomination to challenge President Joe Biden in next year’s election.

While frequently sniping at each other, the Democratic president and the governor have seen their administrations work together after disasters. That includes last year’s Hurricane Ian, which killed more than 140 people and left thousands homeless, and the 2021 collapse of a condo tower in Surfside, which killed 98.

In Fort Lauderdale, floodwaters reached 8 feet deep in the basement of city hall, destroying mechanical and electrical equipment, according to the South Florida Sun Sentinel newspaper. To keep the building operating with the use of diesel-fueled generators will cost as much as $50 million, officials said. Keeping the building open will also require extensive mold remediation work.

The city has already planned to replace the building and will be better off moving city offices to another site and knocking down the blocky office building, the mayor told the newspaper. A vacant Kaplan University structure may be a temporary headquarters, officials said.

Copyright 2023 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

By William Rabb 

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The owners of a Fort Myers roofing company, one that has been the subject of a number of complaints from consumers and which has filed multiple assignment-of-benefits lawsuits against property insurers, have pleaded guilty to more than $1 million in tax evasion.

David T. Aaron and Russell Ultes, co-owners of Marlin Construction Group LLC, cashed millions of dollars of customer checks at check-cashing businesses in order to underreport earnings and avoid federal taxes, federal prosecutors said last week. The men also used the cash to purchase luxury items for themselves, including jet skis and automobiles, according to the criminal complaints.

“In total, Aaron and Ultes caused a tax loss to the IRS of over $1.4 million,” the U.S. Department of Justice said in a news release.

The men could face as much as five years in prison, along with restitution requirements and fines.

Marlin Construction Group is well known to some Florida property insurers. Court records show that in 2018 and 2019, the firm filed at least three AOB lawsuits, against the Hartford Insurance Co., Metropolitan Casualty Insurance Co., and Church Mutual Insurance Co. All were removed to federal court and were settled by 2021. Marlin also filed as many as 15 suits in Collier County, against Castle Key Insurance, United Property & Casualty Insurance Co., FedNat Insurance, Avatar, First Protective, St. Johns and other property insurers in recent years, records show.

The roofing and construction firm also has seen more than 20 complaints filed against it with the Better Business Bureau. Some customers charged that the firm did not complete roof jobs, left leaks in the roof, or caused other damage to the property. And in 2021, WINK TV news in Fort Myers reported that a Citizens Property Insurance Corp. investigator recorded a Marlin employee deliberately damaging roof shingles on a home.

An affidavit from the investigator notes that, “Citizens had a previous suspicious claim with Marlin with the allegation that an employee, TJ McCowan, with Marlin was allegedly damaging roofing materials and exaggerating the damage prior to the adjuster’s arrival,” the news station reported.

The Florida Department of Financial Services investigated the matter and another Marlin employee told investigators that McCowan had been instructed on how to cause damage to the roof so that the homeowner would qualify for a new roof, paid by the insurance carrier, WINK reported.

Aaron and Ultes could not immediately be reached for comment.

The tax evasion and check-cashing problem is not unheard of in the construction business, prosecutors have said. It worked like this: Marlin Construction was an “S” corporation, based in Fort Myers. Companies organized under subchapter S of the U.S. tax code are considered “flow-through” entities, with all gains and losses passed to their shareholder owners, court documents show.

Marlin was owned by Samber Contracting LLC, which was owned by Ultes, and by DNC Holdings LLC, owned by David Aaron. Instead of properly reporting income from the Marlin company, from 2018 to 2020, Aaron and Ultes cashed more than $3 million in checks from customers, the criminal information documents charge.

The men then provided false information to Marlin’s tax preparers and falsified their own personal tax returns, prosecutors said.

Official documents did not indicate if the company also underreported payroll in order to reduce workers’ compensation premiums, a widespread problem in the U.S. construction industry. Florida’s Division of Workers’ Compensation records show that Marlin Construction Group held comp insurance through Lion Insurance Co., with a policy cancellation date of Jan. 1, 2023.

Marlin and Aaron hold active contractor licenses, according to the state Department of Business & Professional Regulation. No license information could be found for Ultes or Samber Contracting.

Update: An earlier version of this article reported that the Florida DWC search page did not show proof of workers’ compensation insurance for Marlin Construction Group.

The causes behind the social inflation theory are numerous, but one of them is that attorney advertising affects the public in unexpected ways, according to some defense lawyers.

By Charles Toutant |

Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer.

A billboard advertisement for Massey Law, a personal injury law firm in Athens, Georgia, on Feb. 6, 2023. (Photo: Alex Anteau/ALM)

Editor’s Note: This is the second installment of a multi-part series examining the factors affecting the rise in nuclear verdicts across the insurance and legal industries, and is published in conjunction with our sister publications on ALM’s Law.com websites. 

Why do personal injury lawyers advertise on television and billboards? Maybe because it helps them find clients amid heavy competition, or to inform the public about their rights, or even to build a lawyer’s name recognition.

But does lawyer advertising lead to bigger recoveries for plaintiffs?

The defense bar and insurance companies think so. They use the term “social inflation” to describe a pattern of longer trials and larger verdicts and settlements that are not supported by a legal or factual basis.

Such outcomes have been described as “nuclear verdicts,” and more recently the term “nuclear settlements” has come into use.

The causes behind the social inflation theory are numerous, but one of them is that attorney advertising affects the public in unexpected ways, according to some defense lawyers.

When plaintiff-side lawyers get a big recovery, they advertise it on billboards and in television commercials and seek publicity in the media, said Robert Tyson, a defense attorney at Tyson & Mendes in San Diego who advises other lawyers on how to avoid nuclear verdicts and settlements.

Such ads serve to desensitize potential jurors to the idea of awarding large sums, Tyson said.

A lawyer who obtains a hefty recovery is “able to advertise it as plaintiffs lawyers, in order for it to get published in newspaper articles and for the general public who sits on the jury to get numb to it, right? Like, what’s the value of a life now? $10 million? You don’t blink at that anymore,” Tyson said. 

‘Potential jurors see these numbers’

Attorney advertising not only helps plaintiffs lawyers recruit new clients, but ads also have a powerful influence on potential jurors, the Defense Research Institute said in a white paper on social inflation.

The DRI describes itself as “the largest international membership organization of attorneys defending the interests of business and individuals in civil litigation.” It cites a $2 billion verdict that an Oakland, California, jury awarded in 2019 to a husband and wife who claimed they developed cancer from using the weedkiller Roundup.

The DRI said a widely aired local television ad in the weeks before the trial touted another jury award for “nearly $300 million” in a previous Roundup trial in neighboring San Francisco.

“High jury verdicts posted on billboards or touted on television and social media have an effect. Potential jurors see these numbers on a regular basis and become desensitized to the gravity of these large numbers,” the DRI white paper said. “They may believe such verdicts are awarded with regularity, in the normal course of the legal processes. They are certainly not advised of defense wins, or cases that are ultimately resolved at a much lower figure. Thus, they mislead potential jurors.”

The DRI also said spending on attorney advertising appears to correlate with high damage awards.

Florida, Texas, California, New York and Georgia saw the highest expenditures on legal service advertising in the past five years, the DRI said, citing data from the U.S. Chamber of Commerce.

And the same group found that the top states by cumulative nuclear verdicts from 2010 to 2019 are Florida, California, New York and Texas, with Georgia ranked seventh.

That “appears to support the conclusion that excessive verdicts advertised by attorneys are desensitizing jurors to reasonable verdict figures,” the DRI said.

Attorney ads convey a message that a person who is injured in a car accident, or hit by a big truck, or exposed to Roundup is unequivocally entitled to a big recovery, said John C.S. Pierce, who headed up a social inflation task force for the DRI.

“The advertising simply removes the concept of causation,” Pierce said. “You’re just entitled to it. Defense lawyers have to do a little extra work in getting a jury qualified, to help them recognize that this information that comes in over television and billboards might influence the way they make a decision sitting as a juror.”

‘Inferior lawyers … who bring knives to gunfights’

But plaintiffs lawyers have a different view.

John Morgan, for instance, founder of personal injury megafirm and prolific advertiser Morgan & Morgan, rejects the social inflation concept and its notion that advertising brings bigger awards to plaintiffs.

“Just verdicts come as the result of prepared attorneys who believe in their case and their clients,” Morgan said in an email. “Insurance companies have gone in-house to save money. The result is inferior lawyers in many cases, who bring knives to gunfights.”

Speaking of the notion that lawyer ads have an impact on recoveries, Morgan said, “These lawyers should stop making excuses for their failures and work on their skills and pay fairly. Juries are offended when the defense suggest no liability or low amounts of money where the evidence is contrary to their argument,” he said.

Mark Dubois, whose practice at Geraghty & Bonnano in New London, Connecticut, focuses on legal ethics, attorney discipline and malpractice, said that voir dire typically weeds out any prospective jurors with strong predilections.

“I’ve tried many dozen cases, and no juror ever told me that advertising played any part in their reaching a verdict. Of course, that was before social media. Heck, it was before we even used computers,” said Dubois, a former longtime chief disciplinary counsel for Connecticut who previously practiced personal injury law.

“However, studies of cognitive bias suggest that priming and anchoring strategies can get jurors to pick higher starting points when entering into negotiations, and I can imagine that these same strategies could result in higher verdicts, or at least less resistance to arguments for higher awards,” Dubois said.

He asks if there is any empirical proof of the social inflation theory, noting that coincidence is not equal to causation.

Since the U.S. Supreme Court approved lawyer advertising in the 1970s, the insurance industry has complained that high verdicts, driven by advertising and contingent fees, were raising the costs of insurance, especially malpractice insurance for doctors, Dubois said. But he cited a study that showed no connection between lawyer ads and big awards.

Dubois said, “So I’d view this claim as probably just a continuation of the ebb and flow, push and pull between trial lawyers and insurance companies that’s been going on for the last 50 years.”


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By Brittney Meredith-Miller 

Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer.

The Insurance Information Institute reports 6.1% of insured households in the United States filed a homeowners insurance claim in 2020 – up from 5.29% in 2019.

The most common causes of homeowners claims, according to Experian, are:

  • Medical payments: 0.3% of claims, with an average cost of $7,147
  • Theft: 0.6% of claims, with an average cost of $4,415
  • Bodily injury and property damage: 2% of claims, with an average cost of $30,324
  • Miscellaneous property damage and financial incidents: 8% of claims, with an average cost of $820 to $6,663
  • Water damage and freezing: 19.9% of claims, with an average cost of $11,650
  • Fire and lightning: 23.8% of claims, with an average cost of $77,340
  • Wind and hail: 45.5% of claims, with an average cost of $11,695

Trust that they have been sold the appropriate policy and will be protected by their carrier when disaster strikes are things most consider heavily when choosing where to purchase a policy. The truth is, however, not every incident where damage occurs to your home will result in a paid claim; no matter how comprehensive your coverage may be.

In the slideshow above, we’ll examine the eight most common reasons insurers deny homeowners claims, according to Credible.



Brittney Meredith-Miller

Brittney Meredith-Miller

Brittney Meredith-Miller is assistant editor of PropertyCasualty360.com. She can be reached at bmmiller@alm.com.

By William Rabb

Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer.

After five years of tweaks to Florida’s insurance and tort laws, all designed to reduce the vast amount of claims litigation and – eventually – bring down property rates, many in the industry argue that there’s still one big piece of the puzzle that’s missing: an affordable, effective, state-run layer of reinsurance that could have an immediate impact on costs.

But with just two weeks left in the 2023 regular session of the Florida Legislature and no bills in the hopper, hopes are fading that lawmakers will warm to the idea.

“It’s dead as far as I know,” said John Rollins, a former chief financial officer for a Florida insurance carrier.

“It’s unfortunate, but we never heard there was much appetite for it this year,” said Melissa Burt DeVriese, president of Security First Insurance Co., based in Ormond Beach.

Unfortunately, the benefit of that reduction in litigation is probably going to be canceled out by the expected increase in the cost of reinsurance.

Others in the industry agree that legislators, hit with criticism that recent tort-reform and insurance rescue laws may be seen as too “insurer friendly,” may now have little interest in another insurance-assistance package, no matter how much it may be needed. The deadline for new bills has long passed, but there is a glimmer of hope that a reinsurance bridge-type measure could be added as an amendment to another bill before a May 1 deadline.

A white paper being circulated by former Deputy Insurance Commissioner Lisa Miller and others explained that reinsurance for several Florida-based carriers increased by as much as 60% in January. With the June 1 renewals right around the corner, costs are expected to rise again, while reinsurers’ coverage has continued to shrink.


A proposed, temporary, lower-level state program, dubbed the Florida Insurance Rate Reduction Mechanism, would have an attachment point of $500 million to $1 billion, with a limit of $3 billion, the white paper and Miller said. That optional program could stave off more insurer insolvencies and could save Florida homeowners as much as $2 billion a year, altogether, or about 15% for the average policyholder, she suggested.

Critics may point out that Florida lawmakers have, in fact, offered two state-backed reinsurance programs in the last 12 months: RAP, the Reinsurance to Assist Policyholders fund, approved at a special session last summer; and FORA, the Florida Optional Reinsurance Assistance Program, passed in December.

But some insurers have said that neither program hit the mark. RAP did not provide enough coverage and FORA was too expensive and didn’t offer the level of coverage at the bottom of the reinsurance tower, where carriers need it the most. FORA was priced at 50% to 65% of reinsurance market rates. But with market rates soaring by that much or more in the the last year, the plan provided little help, insurers have said.

Just three insurers have signed up for the FORA program, according to a preliminary list provided Tuesday by the Florida State Board of Administration. The deadline for agreeing to participate in layers 1 through 3 of the plan was Monday, April 18. First Protective Insurance Co., Cypress Property & Casualty Insurance and American Coastal Insurance are the only carriers to participate in the program, so far. American Coastal had just 5,400 policies in force as of late last year, but First Protective is the eighth-largest insurer in Florida, with some 230,000 homeowner policies and $633 million in direct premium written.


The deadline for FORA’s layer 4 sign up is May 30, two days before the private market reinsurance renewals for many carriers.

Florida lawmakers have approved six significant insurance measures since 2019 – to limit assignments of benefits, curb roofer solicitations, ban one-way attorney fees, limit roof replacements and curtail bad-faith and claims lawsuits. Insurers have generally welcomed all of those. But insurance executives and legislators have repeatedly said it could be another 18 months before the latest and most extensive reforms start to translate into lower rates for consumers.

The one idea that could have a faster impact, perhaps as soon as 60 days, some advocates have said, now seems out of reach.

“Year over year, consumers have been getting hit with rate increases, and if there’s not some additional public reinsurance capacity offered, the insurers have no choice but to pass another reinsurance rate increase on to consumers,” said Paul Handerhan, president of the Florida-based Federal Association for Insurance Reform. “So after June 1, when they get their policy renewals in the mail, those higher reinsurance costs will be reflected.”

FORA, the Florida Optional Reinsurance Assistance Program, enacted in December:

  • Creates an optional hurricane reinsurance program that insurers can purchase at
    “reasonable” rates. Rates vary by tier level purchased and will range from 50% to
    65% rate on-line.
  • Provides purchase tiers that begin at the Florida Hurricane Catastrophe Fund (FHCF)
    attachment point and cumulatively are limited to no more than $5 billion below the
    FHCF attachment point.
  • Allows insurers that purchase FORA coverage or receive free Reinsurance to Assist
    Policyholders (RAP) coverage at each tier to have the option to purchase the next tier
  • Maintains the Reinsurance to Assist Policyholders (RAP) program, thus allowing
    those insurers and their policyholders that could not participate during 2022-2023, to
    receive and benefit from RAP reinsurance in 2023-2024.
  • Funds FORA coverage with $1 billion in general revenue funds and the premiums
    insurers pay for FORA coverage. Source: Florida Senate analysis.

Premiums, which have climbed sharply in recent years for most property owners, are expected to spike again this year. The average cost for homeowners will rise modestly, nationwide, in 2023. But in Florida, property insurance rates could jump by more than 40%, according to the Insurance Information Institute and other rate-tracking reports. Florida homeowners will continue to pay some of the highest premiums in the country, Insurify, a quote-comparison and insurance provider, predicted recently.


“It’s unfortunate that Florida legislators could not come to agreement on providing an affordable reinsurance program for the 2023 Atlantic hurricane season,” said Mark Friedlander, director of communications for the Institute. “This will have a detrimental effect on many Florida domestic insurers as upcoming renewals may run as high as 70% year-over-year.”

Inadequate levels of reinsurance coverage could lead to financial ratings downgrades, potential insolvencies and even higher premiums for policyholders, he warned.

At a recent gathering of the Pensacola, Florida, Association of Realtors, Miller blamed Realtors for not lobbying harder for a new state reinsurance offering. Despite recent cries from real estate interests that higher insurance premiums are hammering home sales in some parts of the state, few have pushed for reinsurance legislation this year, she said.

The Florida Association of Realtors’ public policy communications director, Tom Butler, responded obliquely to the criticism.

“Florida Realtors applauds the Florida Legislature for taking unprecedented steps during the 2021 session and two special sessions last year to stabilize Florida’s deteriorating property insurance market,” Butler said in an email. “We understand that comprehensive property insurance reform takes time to provide relief for policyholders and are confident that these reforms will ultimately attract insurance and reinsurance capital back to the state.”

Rollins, formerly with Olympus Insurance Co., argued that another reinsurance program may have done little to help some struggling insurers, and would have only postponed some inevitable insolvencies after poor financial decisions by executives in recent years.

DeVriese noted that part of the December reform package, Senate Bill 2A, is already having a significant impact on claims litigation in Florida, and most carriers are grateful. For the first three months of this year, Security First has seen half the number of lawsuits it has faced in years past for the same period.

“Unfortunately, the benefit of that reduction in litigation is probably going to be canceled out by the expected increase in the cost of reinsurance,” she said.


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By Jim Sams |

Please call  Lee from  USAsurance Powered by WeInsure. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer.

Shiloh filed a damage claim after each storm, even though it had negotiated to eliminate coverage for named storms and reduced its premium cost from $48,545 to $22,500.

Aspen Specialty Insurance Co. denied those claims, but on Thursday a panel with 11th Circuit Court of Appeals ruled that the carrier must pay. Even though the parties clearly intended to eliminate hurricane coverage —and “Ex wind” was scribbled on Shiloh’s insurance application — Aspen issued policies that did not include an exclusion for named windstorms.

The appellate panel reversed a US District Court decision that found it would be “absurd” to find that there was coverage for hurricane damage because the church and the insurer had made their intentions clear.

“We hold, to the contrary, that, under Florida law—as in the law more generally—in the event of a conflict between clear text, on the one hand, and even compelling evidence of extra-textual ‘intent,’ on the other, the latter must give way to the former,” the opinion says.

In May 2015, Shiloh was refinancing a bank loan. The church asked its insurance agent to find out how much it could save if it excluded coverage for hurricanes. The agent quoted a premium of $32,000, but later revised that to $22,500.

Shiloh purchased a 2016 policy with the understanding that named windstorms would be excluded from coverage.

But after Hurricane Matthew struck on Oct. 6, 2016, the church filed a claim for damage caused by the storm. Aspen denied the claim.

Hurricane Irma struck in September 2017. Shiloh filed a second claim, which Aspen also denied.

Shilo filed a lawsuit in 2020 seeking a declaration from the court as to whether it had coverage. The complaint also accused Aspen of wrongfully denying its hurricane-damage claims.

Terra MODIS image of Hurricane Matthew from Oct. 7, 2016. Credit: Space Science and Engineering Center, UW-Madison

US District Judge Carlos E. Mendoza, with the Middle District of Florida in Orlando, ruled that no coverage was owed because the parties clearly intended to exclude named windstorms from coverage.

Both quotes given by Shiloh’s insurance agent stated that named windstorms would be excluded, Mendoza said in an order granting summary judgment in favor of Aspen. The judge acknowledged that the policies did not include a named windstorm exclusion, but said under the circumstances it would be absurd to find coverage was owed.

On appeal, the 11th Circuit said a cardinal principle of Florida insurance law is that the text of a policy is paramount. Also, in insurance disputes, ambiguous language in a policy is interpreted against the party that drafted the contract, a principle known as contra proferentem.

The panel said it came across a similar issue in a 2013 case and sent a certified question to the Florida Supreme Court. The court answered that ambiguities in insurance contracts should be interpreted using contra proferentem “rather than extrinsic evidence of the parties’ supposed ‘intent.’”

The opinion said the policy issued before Hurricane Irma clearly covers named windstorms, no matter what the church discussed with its insurance agent. The policy issued before Hurricane Matthew struck is less clear, but also must be interpreted to cover named storms because there is no exclusion, the panel said.

“As already explained in detail, Florida law is clear that when an insurance policy is facially ambiguous, the ambiguity is resolved in favor of coverage and against the insurer, without regard to extrinsic evidence of the parties’ supposed intentions or expectations,” the opinion says.

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