Floridians flood the courts post-Ian, set record in Jan. for legal prep

Florida homeowners prepped a record amount of litigation against insurers in January, the first month following enactment of litigation reform.

Filings of intent to litigate jumped to a record 7028 cases in January, some 60% above the 2022 monthly average and smashing a previous monthly record of 5286 from August 2022, data from Florida's Department of Financial Services indicated. Floridians are required to warn of their pending legal actions against insurers since mid-2021.

Some 15 firms saw a triple digit count of pending lawsuits, out of which four topped the 500 mark.

The state's insurer of last resort, Citizens Property Insurance Corporation, led the pack with 960 notifications, also a record high for the firm.

Universal Property & Casualty will face another 715 lawsuits, note a record for the embattled firm, the data indicate. American Integrity showed up on 581 notifications and United Property & Casualty on 507. State Farm Florida will face 413 new lawsuits and Heritage Property & Casualty will face 309.

The January reading comes at a conflux of drivers, most notably enactment of litigation reforms by Florida lawmakers and regulators and the rise of claims following Hurricane Ian.

Legislation enacted at a special legislative session mid-December eliminated Florida's one-way attorney fee provisions on property insurance suits that protected plaintiffs from legal fees.

Florida additionally eliminated all future assignment of benefits as of January 1 for residential policies and in a roll-out beginning January 1 for commercial.

Critics of Florida’s assignment of benefits (AOB) provisions and statutes on one-way attorney fees had long argued that contractors armed with AOB agreements and backed by an army of lawyers leverage the rule without risk of legal fees for losses. Florida ends up with an overwhelming majority of the nation’s lawsuits on a small minority of the nation’s claims.

For Citizen's, additional regulatory relief is set to kick-in. Citizen's has secured new rights from February 1 to put legal conflicts to expedited resolution at Florida’s Division of Administrative Hearings.

But Hurricane Ian will distort the view to any relief from the more excessive legal endeavours.

Some 4919 or 70% of the January notifications come from the 807 Florida zip codes used by FEMA to identify impact regions.

And 876 or 12.5% of the January filings come from the 33 zip codes which one key direct mail service for lawyers and contractors identified as having experienced the eye wall of Hurricane Ian. Notifications from those zip codes only shot above trend from December (76% over the 11M 2022 average), then went five times that average for the January count.