Keeping up with trends in property insurance law is why so many people come to this blog. US District Judge Michael Moore recently pointed out that some policyholder protection laws have no teeth because the policyholders who are injured cannot enforce the insurance laws designed to protect them. He recently wrote:1
For better or worse, the plaintiff is right to point out that subsection (5)(a) will sometimes create a breach without any remedy—i.e, cases where an insurer has been found to have violated only the interest provisions of subsection (5)(a) with no other violations merit omnibus merits review. For example, if Plaintiffs̵7; legal and factual allegations were to bear fruit in the present case absent the “sole basis” clause, the Court estimates that Plaintiffs could recover approximately $30,000.00 in damages.
The Court is concerned about such a regime: subsection (5)(a) expressly prohibits conduct while giving that conduct a safe harbor. And perhaps more than coincidentally, the court notes a clear pattern where this defendant faces charges of failure to pay interest under subsection (5)(a). We’re not here to decide whether State Farm has been a good neighbor. But, rightly or wrongly, State Farm has been involved in several similar cases (some of which this order rests on.)… Still, the fact remains that any flaws in this framework are legislative in nature, which would be its fix. The court should not second guess an expedient legislative system without a firmer statutory or legal basis for doing so.
Florida Governor DeSantis and the current Florida Republican leadership are writing similar insurance laws that remove private remedies for Florida policyholders who are injured so that only an administrative entity can do anything about the violation. These are really bogus consumer protections, and Floridians should be outraged that these politicians think citizens won’t go after the insurance company that supports Republicans who write these laws.
Then again, I’m a registered Republican and even gave a six-figure donation to a former Republican governor running for president. Republican Donald Trump is right when he says that Republican DeSantis and Florida Republican political leaders have sold out to the “globalist” insurance companies.
In this case, State Farm delayed payment of the amounts owed, and the interest would be in excess of the $30,000 required to be paid under the Florida Statute. Did State Farm pay what the law requires it to pay? No. The problem is that Florida law does not allow the policyholder to sue to recover the interest. So, State Farm didn’t pay it even though the law required it to be paid.
The bottom line is that the injured policyholders should be able to enforce the laws designed to protect them because those policyholders have the greatest motivation to enforce the laws against the wrongdoing insurance companies. Taxpayers should not have to pay money to support an unnecessary government entity to enforce laws that are better enforced by the people with the money at stake.
I don’t want to be a sellout.
1 Barbato v. State Farm Florida Ins. Co.No. 1:22-cv-22891 (SD Fla. Apr. 14, 2023).