Although Florida's hard-fought property insurance bill SB 408 became law May 17 upon the signature of Gov. Rick Scott, not all the provisions within that bill became effective that day.
Effective June 1—the start date of Florida's hurricane season—are changes to Florida Statute 626.854 regarding compensation to public adjusters. Specifically, that compensation for a "reopened or supplemental claim may not exceed 20 percent of the reopened or supplemental claim payment."
Also effective June 1 is the mandate that all claims arising from a windstorm or hurricane must be filed "within 3 years after the date the hurricane first made landfall or the windstorm caused the covered damage."
Prior to the deadline change, claims could be made up to 5 years after the event. The 5-year timeframe received significant attention following Hurricane Wilma, which made landfall in Florida on Oct 24, 2005. As the fifth anniversary neared in 2010, homeowner claims burgeoned. Insurers blamed the uptick on aggressive advertising to homeowners by public adjusters. The 3-year provision in SB 408 was widely seen as a way to rein in that activity.
On Jan 1, 2012, another provision in SB 408, which addresses contracts with and advertising practices of public adjusters, will take effect.
SB 408 was opposed by state and national public adjuster groups.
Language within the bill also mandates that some changes to Florida Statute 215.555, which deals with the Florida Hurricane Catastrophe Fund, become effective June 1. Those changes include a redefinition of the term "losses," and a detailed list of events not included under that term. The bill states:
"'Losses' means all incurred losses under covered policies, including additional living expenses not to exceed 40 percent of the insured value of a residential structure or its contents and amounts paid as fees on behalf of or inuring to the benefit of a policyholder. The term does not include:
- Losses for fair rental value, loss of rent or rental income, or business interruption losses;
- Losses under liability coverages;
- Property losses that are proximately caused by any peril other than a covered event, including, but not limited to, fire, theft, flood or rising water, or windstorm that does not constitute a covered event;
- Amounts paid as the result of a voluntary expansion of coverage by the insurer, including, but not limited to, a waiver of an applicable deductible;
- Amounts paid to reimburse a policyholder for condominium association or homeowners' association loss assessments or under similar coverages for contractual liabilities;
- Amounts paid as bad faith awards, punitive damage awards, or other court-imposed fines, sanctions, or penalties;
- Amounts in excess of the coverage limits under the covered policy; or
- Allocated or unallocated loss adjustment expenses."
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