Recent Florida Decision Highlights Amendment to Florida Statutes

A Florida court recently addressed a class action lawsuit against an insurer for breach of contract and violation of Florida Statutes, based solely on the insurer’s failure to pay interest on overdue claims.  Although the case was dismissed for lack of standing due to there being no private right of action under the statute, the case serves as an important reminder of the recent amendment to Florida Statutes, as it applies to insurance authorized under Florida’s Surplus Lines Law.

Florida Statute § 627.70131 sets forth specific time-sensitive claims handling requirements regarding new claims for property damages submitted by a policyholder.  The statute further requires an insurer to render a decision to either pay or deny a claim for property damages within 90 days of receipt of an initial, reopened, or supplemental claim made by a policyholder unless there are factors beyond the control of the insurer that prevent such payment.  Notably, the statute provides that any payment issued on a property insurance claim, even partial, bears interest that begins to accrue the moment the insurer receives notice of the claim.

In light of this amendment and its express application to surplus lines insurers, it is imperative that any claim for benefits under a property insurance policy be investigated and adjusted as quickly and efficiently as possible to avoid any exposure to additional costs related to interest.

Please contact any member of the Phelps Insurance team if you have questions or need advice or guidance.