By Frank De Varona
In Florida, in 2023, the discussion over frivolous lawsuits and the impact they were having on our auto, home, and medical malpractice insurance was a raging debate. Our insurance market was in crisis. Many people were even losing their policies.
The answer seemed to lie in one key area: lawsuits. Florida had become a Judicial Hellhole and was known as a place where enterprising attorneys could pretty much be guaranteed a payout every time they sued an insurance company, no matter how frivolous the lawsuit. The ease of their payouts is related to the law that requires insurance companies to pay the legal fees for those who sue them. Thus, for any lawsuit, no matter how small, attorneys were charging big fees and getting paid. This kind of ATM was just simply not sustainable.
The governor and legislature took action to discourage frivolous lawsuits by passing a lawsuit reform package that has been groundbreaking, got Florida off the judicial hellhole list, and has succeeded in causing auto and home insurance rates to go down for the first time in decades. Insurance companies have a cap on how much profit they can make, and with profits increasing, the excesses have to be turned back to their customers in the form of rate cuts. That is real leadership success, and it will go a long way toward easing Florida’s affordability crisis.
Our property insurance market is beginning to look like a real marketplace, with the number of policies being held by Citizens Property Insurance being way down, and the number of new insurers coming into the market beginning to tick up. Market forces are the best guarantee for lower prices. We also need to continue to encourage our legislature to make penalties stiffer for insurance fraud and stop the third-party financing of lawsuits. Third-party financing is particularly concerning because even foreign sovereign wealth funds like that of China have invested in financing lawsuits in the US. We should never allow this in Florida.
The legislature is currently considering a few bills as we get into this legislative session that would wipe away some of the reforms of 2023, even making it easier to sue for more damages in medical cases. The legislature should stop any effort to go backward on lawsuit reform, and if they were really committed to making Florida more affordable, they would consider even more reforms to limit frivolous lawsuits and protect our small businesses from legal bullying.
