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Restoration Contractors Claim New Florida Property Insurance Laws Unconstitutional | Property Insurance Law Team Blog



The Restoration Association of Florida (RAF) and a restoration contractor did not let Florida Gov. DeSanti’s ink dry before filing a lawsuit to repeal the new property insurance laws. The RAF recently filed a lawsuit against the Florida Insurance Commissioner, which was noted in last month’s post, The Restoration Association accuses the Florida Insurance Commissioner of unconstitutional conduct.

The relevant argument for the latest trial is found in these allegations:

During a recent special session, the Florida Legislature passed legislation that unconstitutionally focuses on benefit-sharing agreements (AOBs) implemented between a homeowner and his or her optional contractor. Instead of addressing real estate insurance factors that have led to its problematic volatility, the Florida Legislature chose to violate the constitutional rights of contractors ̵

1; the individuals and businesses that repair the homes and commercial buildings owned by Floridians damaged by extreme weather events such as for example Hurricanes.

2. SB 2-D prevents contractors, as holders of AOB, from recovering their legal fees in the event that they win against insurers in litigation – also called prevailing party fees. The deprivation of this right is significant because SB 2-D incorrectly treats contractors, as contractors, in different ways than homeowners and insurance companies.

Critically, SB 2-D leaves intact (i) the right of a homeowner to reclaim prevailing party fees against an insurer in a lawsuit not initiated by a right holder; (ii) the insurer’s right to recover applicable party fees in a lawsuit, whether initiated by the homeowner or a suitor; (iii) the transferor’s obligation to indemnify and hold a homeowner safe from all losses; and (iv) the requirement that the contractor waive all recourse rights against the homeowner when the insurer does not pay all outstanding amounts due. Such different treatment of contractors performing work under an AOB is unconstitutional under the Florida Equality Clause clause.

4. SB 2-D also has the effect of denying these contractors trial and access to justice, a fundamental right under the Florida Constitution. Remuneration paid to insurers for work performed by contractors under an AOB is generally not large in monetary amounts. When the insurer delays, underpays or does not pay a claim at all, contractors are forced to initiate action against the insurer to get back the full amount of the work performed.

5. Without a corresponding right to recover the applicable party fees, SB 2-D makes it financially impossible for the contractor to exercise his legal rights and legal remedies in court. Invoices for work performed by contractors under the AOB are generally not significant enough for a solicitor to agree to represent the contractor on an unforeseen fee basis and it is not economically reasonable for the contractor to pay a solicitor on an hourly basis to recover the amount (s). ) guilty.

6. In addition, contractors performing emergency services under an AOB usually have a $ 3,000 ceiling for services rendered. In this case, removing the civil service providers’ rights to recover applicable party fees will virtually guarantee that this sector of the industry is put into bankruptcy. Denying contractors access to courts and litigation violates the Florida Constitution.

The case requires an injunction so that it can go quickly. Who will win? I do not know. But the allegations about this complaint are exactly what the insurance industry and its lobbyists were hoping for – to put contractors who rely on AOB disputes to force payment out of the insurance restoration business as it currently exists.

I highlighted “as it currently exists” to refer to my prediction that the real estate insurance industry, in many parts of the country, wants to move to a “managed repair” in the same way we have our lousy health insurance – “managed care”. “The problem with both systems is that the insurance companies ultimately control the management of what we have most valuable – our health and our homes.

I’ll write more about that tomorrow.

Today’s thoughts

Perfection can not be achieved, but if we pursue perfection we can capture excellence.
– Vince Lombardi


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