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FLORIDA - Florida legislators are once again debating the rules surrounding legal fees in property insurance disputes, reigniting a battle over whether homeowners should have greater power to challenge insurance companies in court.
The House Civil Justice & Claims Subcommittee voted 16-1 on Thursday to advance HB 1551, a bill that could reverse a 2022 law that shielded insurance providers from paying homeowners’ legal fees in coverage disputes.
While the insurance industry contends that the law helped stabilize Florida’s market by limiting lawsuits, consumer advocates and some lawmakers argue that it unfairly tilts the legal system in favor of insurers, making it harder for policyholders to fight claim denials.
The proposed legislation aims to create a “loser pays” system, where the losing party in an insurance lawsuit would be required to cover the other side’s attorney fees.
Supporters of the measure argue that the current law makes it financially risky for homeowners to sue insurers, even in cases where their claims were wrongfully denied.
Opponents, including major industry groups like the Florida Insurance Council, the Florida Chamber of Commerce, and the Personal Insurance Federation of Florida, argue that rolling back the 2022 reform could lead to an increase in lawsuits, causing financial instability in the insurance market.
Prior to the legislative changes, Florida saw a surge in litigation, which insurers claimed contributed to rising costs and even forced some companies into insolvency.
By eliminating the one-way attorney fee system, lawmakers had hoped to reduce unnecessary lawsuits and lower premiums for consumers.
The bill must clear two additional House committees before it can advance to a full vote.
A companion measure, SB 426, introduced by Sen. Jonathan Martin (R-Fort Myers), is also making its way through the Florida Senate.