What You Need To Know About Recent Changes To Florida Property Insurance Law Affecting Admitted And Surplus Lines Insurers

• Published date: 01 June 2022
• Subject Matter: Corporate/Commercial Law, Insurance, Corporate and Company Law, Contracts and Commercial Law, Insurance Laws and Products
• Law Firm: Butler Weihmuller Katz Craig LLP
• Author: Mr William B. Collum

Having been called back to the capitol by Florida's governor for a special session to address issues within the property insurance market, the Florida Legislature passed two property insurance bills, SB 2-D and SB 4-D, both of which were signed by the Governor on May 26, 2022. SB 2-D and SB 4-D have provisions that affect both admitted carriers and surplus lines carriers. The key provisions of these bills addressed in this article became effective upon the Governor's approval of the bills on May 26, 2022.

In addition to these recent legislative changes, the Florida Supreme Court on May 26, 2022 amended Florida Rule of Civil Procedure 1.442 regarding serving proposals for settlement. The rule amendment, effective July 1, 2022, provides that a proposal for settlement must exclude nonmonetary terms, with the exception of dismissal with prejudice and any other nonmonetary terms permitted by statute.

Provisions Relating to Roofs

Roof Deductibles

SB 2-D creates Florida Statute ' 627.701(2)(c), permitting a carrier, with the approval of the Florida Office of Insurance Regulation, to offer special deductibles applying only to roof losses. SB 2-D creates Florida Statute ' 627.701(4)(e)1 and 2 requiring mandatory language and disclosures on the declarations page for policies that contain deductibles applying only to roof losses.

SB 2-D creates Florida Statute ' 627.701(10) addressing the mechanics of a roof deductible applying to losses other than losses from a hurricane. A separate roof deductible is permitted if the insured is given a premium credit or discount for the policy. If the separate roof deductible is offered by the carrier at the time of the initial issuance or renewal of the policy, the insured must sign a form approved by the Florida Office of Insurance Regulation in order to opt-out of the separate roof deductible.

If the separate roof deductible applies, no other deductible can apply. The separate roof deductible may not exceed the lesser of 2% of Coverage A limit or 50% of the cost to replace the roof. The roof deductible can only apply to a Replacement Cost claim and it cannot not apply to

1. A total loss by a covered peril;
2. A hurricane loss;
3. A loss from tree fall or other hazard that damages the roof and punctures the roof deck; or
4. A roof loss requiring repair that is less than 50% of the roof.

SB 2-D amends Florida Statute ' 627.7011(3)(a), providing that, if a separate roof deductible applies, the insurer may limit the claim payment to Actual...