Final claims under old Florida laws leave future uncertain
Over six months after Ian ravaged Florida's Gulf Coast, lawyers are seeing the last round of hurricane claims under the old Florida property insurance laws.
More than six months after Hurricane Ian ravaged Florida’s Gulf Coast, insurance lawyers are starting to see the last round of hurricane-related claims under the old Florida property insurance laws.
Last year, Gov. Ron DeSantis passed the first piece of Florida legislation aimed at helping insurance companies avoid lawsuits after the state faced rising insurance rates amid turmoil within the industry, which went into effect March 1. Now that Hurricane Ian-related claims are starting to pick up steam, lawyers on both sides of the claims are getting closer to an uncertain future for their practices.
In addition to Ian now being Florida’s most costly hurricane, lawyers are seeing that flood damage is making up a significant amount of the damages within the wave of claims.
“The big issue is that from down in Naples all the way through Fort Myers, everybody on the coast got flooded,” said Becker & Poliakoff’s Fort Myers managing shareholder, Sanjay Kurian. “That is an event that did not exist in [Hurricanes] Irma, Charley or Wilma.”
Because of that new flooding aspect, Kurian is predicting that his currently high volume of insured-side cases will only continue piling up. As flooding statutes of limitations get closer to sunsetting after a year and as wind damage claims lead to disappointing payouts for insurance consumers, Kurian is expecting a better picture in September.
But for now, he’s starting to see a clearer picture of how Ian affected properties across the state.
“When the flood came in, any buildings that weren’t elevated, which there were a lot that predated flooding requirements, essentially the entire first floors have been damaged,” Kurian said.
The complications that come with that extended flood damage can be a preview of what the future may hold as Florida is constantly cited as the state most at risk from rising sea levels.
Meanwhile, Kurian is expecting even more litigation to come his way as flooding is just the beginning of the damage.
The combination of more risk factors added onto what Kurian described as the law that may limit a plaintiff’s ability to fight payout disputes, could mean more trouble for Florida’s insured.
Meanwhile, Florida’s not-for-profit insurer just announced a double-digit rate hike.
“The people that are going to get it the worst are folks that have smaller claims that nobody will take on,” Kurian said. “Because there’s no incentive to get rid of your fees or your costs, there’s no incentive to take those claims. The larger claims will probably still move forward.”
Kurian is referring to the new law slashing one-way attorney fees that insurers were required to pay for if insurers were found to underpay claims by $500 or more. And Florida’s next storm will fall under the new rules.
On the flipside of the current cases coming in, Hinshaw & Culbertson partner Joseph Manzo is not seeing the amount of Ian claims meeting the insurers’ “dire” predictions of caseload.
“The volume to date has been less than what all those projections were,” he said.
But, like Kurian, he is seeing the volume of flood claims outpace typical expectations.
“We’re seeing a lot of people with flood damage and claiming wind damage. And whether that’s because they didn’t have flood insurance or they’re trying to recover more, I’m not really sure but we’ve had claims already where there’s a clear line three feet up the wall and damage downstairs and you have plaintiffs just say, ‘Oh, no. This was damaged by wind, not by flood,’” he said.
In terms of how insurance companies have reacted to Florida’s shifting insurance environment, Manzo says he doesn’t see more willingness among insurers to fight claims or to litigate with plaintiffs. But, because there hasn’t been a major disaster since the law took effect, it may be too early to tell how they’ll handle mass claims in the future.
Regardless, Manzo predicts it’ll take years for the law to affect Florida’s property insurance landscape, as he hasn’t seen insurers rushing back into the state after a recent exodus.
Additionally, the courts just got flooded with even more lawsuits as lawyers tried beating the newer legislation aimed at limiting personal injury suits, which will keep the flow of those kinds of claims steady for the near future, Manzo said.
But, beyond Ian claims and the recent wave of personal injury cases, the future seems cloudy for many in the industry.
“Homeowners claims are probably going to be steady for the next year or so. But after that, nobody can predict the future. Is it going to reduce litigation? Is it going to reduce the value of litigation? It’s really hard to tell,” he said. “There’s definitely going to be adapting both on the defense side, and especially on the plaintiffs side.”