The Florida legislature is soon headed back into session with Governor Ron DeSantis aiming for the trial lawyers. At a recent stop in Jacksonville, he described the Sunshine State as a “cottage industry of litigation”.
He went on to say that, “If somebody is harmed, you should be able to get compensated. But I think what our system has done is, you’ll have a situation, someone’s really not liable, but you know if you bring a suit, it’s going to be more expensive to defend the suit. So you (the defendant) have an incentive, as kind of a cost of business, to just do a settlement because that will be cheaper than hiring lawyers to prove your innocence. The problem with that is that those costs get added on to everything that we do.”
What the governor says is a reality in Florida. As someone involved in insurance claims for over twenty-five years in this state, I am the first to attest that there is a tremendous amount of abuse. Arguably the biggest problems are Florida’s crazy, outdated no-fault system related to auto insurance claims coupled with a nonsensical pure comparative tort law that allows for people who are 99% at fault for their own injuries to still file a lawsuit.
Despite years of trying to find a solution, Floridians are paying record insurance premiums while Florida remains the most fraud prone state in the nation.
Ailing Florida insurance industry
Let’s take a look at what really needs to be done. In years past there have been attempts to fix and/or eliminate PIP. In late 2022 there was an attempt to fix Florida’s broken property system and the record premiums that Floridians pay, driven in large part by one way attorney fees and AOB abuse. The problem in Florida is systemic. Just turn on the TV at any hour of the day and watch the parade of attorneys, each promising more money than the next. Not to say that trial lawyers don’t serve a valuable purpose, they do. But there need to be guard rails to protect residents and businesses alike from some predatory and unscrupulous practices.
Florida has become a state where runaway jury verdicts on questionable injury claims have become commonplace. It is a state in which adjusters are routinely threatened with bad faith for simply doing their job of investigating claims. From Jacksonville to Miami and Pensacola to Key West, accident victims are being diagnosed with “disk” injuries that in most other states will be nothing more than soft tissue damage or aggravation of a pre-existing condition.
On the property side of the house, 79% of ALL property lawsuits in the United States are filed in Florida. Yet Florida is a mere 9% of the entire population of the United States. This statistic alone should reinforce the problems Floridians are facing.
So what does the Florida legislature need to do to fix the Sunshine State insurance mess? First, abolishing PIP would be a good start. It is a coverage that provides very limited benefit to recipients and which has become the leading cottage industry of frivolous litigation where disputes over pennies can result in thousands of dollars in attorney fees.
Add to that the lack of a liability insurance coverage for motorists. Florida is the only state with compulsory insurance that DOES NOT include a requirement that motorists carry bodily injury liability insurance. It is estimated that 40% of motorists on Florida roads are either uninsured or underinsured (no BI coverage) resulting in responsible motorists paying record high premiums for UM and UIM coverage.
As a specific example of how problematic uninsured driver’s are in Florida on my own vehicle I pay $145.49 for BI and PD coverage every six months. For that same period I pay $215.18 for UM and UIM coverage. When UM coverages are 67% HIGHER than regular coverages this is again emblematic of a systemic problem in Florida.
Recommendations for legislators
To truly pass meaningful new legislation that will work for the benefit of consumers and businesses, legislators should consider the following:
- Eliminate PIP coverage and mandate BI limits of $25,000 per person and $50,000 per accident.
- Modify the negligence law so that parties more than 50% at fault for a loss are barred from recovering damages from a third party. Currently, under Florida’s pure comparative negligence doctrine, a person who is 99% at fault is still allowed to sue for damages.
- No pay, no play. Florida needs to bar uninsured motorists from recovery of non-economic damages, a solution effectively implemented in several states.
- Cap attorney fees.
- Cap tort damages for “pain and suffering.” Include a “loser pays” provision that applies to not only the plaintiff but their counsel.
- Allow “bad faith” only in the rare situations in which an insurer truly does not honor their fiduciary duties. Enact penalties for trial lawyers who engage in so-called bad faith “setups.”
- Allow a reasonable amount of time to investigate suspicious claims.
- Give law enforcement the teeth necessary to pursue fraudsters while holding insurers harmless during their investigations.
- Enact caps associated with Medicare and/or workers’ compensation, on treatment for soft tissue injuries, which comprise the vast majority of cases clogging our courts.
Unless Florida takes serious steps to address the frivolous litigation clogging our courts, in particular those related to “soft tissue” claims, the problem will not be solved. Both the insurance companies and the trial lawyers need to be held accountable. If insurers can commit bad faith, so to can trial lawyers. By truly understanding the problems in the Florida insurance system, hopefully the legislature can make meaningful changes to benefit consumers while attracting more businesses to our great state.
Christopher Tidball is an executive claims consultant, speaker and author of multiple claims improvement books, including “Re-Adjusted: 20 Essential Rules to Take Your Organization from Ordinary to Extraordinary” and the fictional “Deep State,” an insurance fraud thriller. Views expressed are the author’s own.