How Will Florida's New Insurance Law Affect Adjusters and Carriers in 2023?

Did you hear about the new Florida insurance law in 2023? It’s called Senate Bill 2A, and it started on March 1, 2023. This law introduces stricter rules for insurance carriers and claims adjusters, but includes some relief, too. It’s a welcome change — the Insurance Information Institute said Florida’s insurance market was “on the verge of failure” in June 2022.

Core Changes in the New Florida Insurance Law 2023

The new Florida property insurance law, SB 2A, has some big changes for insurance companies, claims adjusters, and policyholders. Here are the main things you should know. 

• Stops one-way attorney fees
• Shortens claims handling deadlines
• Reduces the time policyholders can file claims
• Changes bad faith claims requirements
• Allows mandatory binding arbitration
• Restricts assignment agreements

How Senate Bill 2A Affects Insurance Carriers

SB 2-A puts specific changes and duties in place for insurance carriers operating in Florida. One key aspect is the repeal of one-way attorney fees if the insured wins a lawsuit. While Florida sees just 9% of all homeowners insurance claims in the U.S., the state sees 79% of the nation’s homeowners insurance lawsuits over claims. This modification alone is expected to save insurance companies a lot of money, reduce the number of cases filed, and lower consumer premiums.

New Responsibilities for Insurers

Senate Bill 2A brings with it increased responsibilities for insurance carriers in Florida. These changes aim to improve communication and response times for claims. As an insurance carrier, you must:

• Pay or deny a claim within 60 days (reduced from 90 days). The Office of Insurance Regulation (OIR) can extend the deadline an additional 30 days under specific conditions.
• Review and acknowledge a claim communication within 7 days (from 14 days).
• Pay undisputed benefit amounts within 60 days (from 90 days).
• Get policyholder consent and offer a premium discount before issuing a policy with the mandatory arbitration clause. Insurers must also give consumers the option to buy a policy without the arbitration clause.

Benefits to Insurance Carriers

Besides cost savings from not having to pay attorney fees if the insured wins a lawsuit, insurance providers can see additional benefits, including:

• Access to affordable reinsurance through the Florida Optional Reinsurance Assistance (FORA) Program.
• Less potential fraud by eliminating the assignment of benefits and requiring policyholders to file claims within one year for new or reopened claims or within 18 months for supplemental claims.
• Reduction in claims-related litigation as a result of revisions in Florida’s bad faith statute and having the option of offering policies with mandatory arbitration agreement clauses.

Impact of SB 2-A on Independent Adjusters

Insurance companies in Florida aren’t the only ones feeling the effects of SB 2A. Independent adjusters will also notice a few benefits and obligations of the new regulations. 

New Responsibilities for Adjusters

As an adjuster, you’ll encounter new obligations that are crucial to your workflow. To navigate the claims process smoothly, you must:

• Begin a claim investigation within 7 days (reduced from 14 days).
• Conduct a physical inspection within 30 days (from 45 days). Note that this timeline also applies to claims during hurricane season.
• Send any adjuster’s report with damage estimates to the policyholder within 7 days.
• Include specific dates and details about the claim investigation in claims records.

Benefits to Insurance Claim Adjusters

SB 2A offers many advantages for independent adjusters. Here are some upsides to keep in mind:

• Enhanced claim documentation through the use of electronic investigation methods, such as video conference communications with the policyholder and clearer photos and video recordings, as well as drones to document the loss.
• Quicker turnarounds of investigations improve efficiency and customer satisfaction.
• Less likely to be dispatched to investigate fraudulent claims as a result of the shorter claim-filing window for policyholders.

How an Independent Adjusting Firm Helps in the New Regulatory Landscape

Navigating the new regulatory landscape introduced by the new Florida homeowners insurance laws can be challenging for insurance carriers. However, you don't have to face it alone. At CNC, we understand the complexities of the new Florida insurance bill and its impact on insurance companies and adjusters. Our independent adjusting firm is here to assist you in managing your claims effectively from start to finish. 

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Contact us today!