Board of Contributors: Now is the time to review property insurance litigation

, Daily Business Review

   |1 Comments

The end of hurricane season is a good time to explore the way property insurance litigation is rapidly changing the legal landscape in Florida, writes Jason Wolf of Koch Parafinczuk & Wolf.

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What's being said

  • Marlene S. Reiss, Esq.

    This article intentionally ignores the purpose of FS 627.428, which is to level the playing field between insureds and insurers. The statute is the only thing that appears to motivate insurers to pay any claims whatsoever, and even then, doesn't work particularly well, since the number of claims denied by insurers continues to increase. The author's statement that "insurers usually settle cases rather than risk the potentially devastating situation in which the plaintiff wins a little bit of money at trial" simply is not true. In fact, insurers routinely deny claims and defend with no legitimate basis for doing so, asserting boilerplate defenses and feuling seemingly endless litigation before the insured collects any benefits whatsoever...and then complain when have to pay the fees incurred by their insureds.

    And, the article's author also glosses over the fact that plaintiffs recover attorney's fees under 627.428 only after the insurer has been found to have wrongfully denied benefits. Therefore, if the insurer had paid a claim that it was legally obligated to pay in the first place, the insurer would be able to avoid its insured's attorney fees altogether.

    First party lawsuits are not "popular" because of the fee statute, as the author claims. Rather, first party lawsuits abound because insurers refuse to pay legitimate insurance claims, (while continuing to rake in ever increasing premiums,) and it is only the fee statute that enables insureds to seek judicial redress when an insurer refuses to pay a claim.

    The statement that "If attorneys couldn’t get fees for suing insurance companies, this practice area would be reduced to a fraction of its present condition, as attorneys would only become involved in large-dollar lawsuits and policyholders with smaller claims would be unable to find legal redress," only underscores the importance of the fee statute. The purpose of 627.428 is precisely to allow policyholders with smaller claims to access the courts with the same representation that policyholders with larger claims may have, and with representation equal to the unlimited legal resources available to insurers; in other words, to level the playing field.

    Legislative interference with FS 627.428 would be a grave mistake and would result in a severe disservice to Florida citizens.

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