Florida’s lawsuit deluge threatens weakened insurance market: Triple-I

The fact trial lawyers have dumped tens of thousands of lawsuits into the Florida courts in March, just before the state’s tort reform legislative overhaul kicked in, adds another threat to the already challenged Florida insurance market, the Insurance Information Institute (Triple-I) has said.

While this isn’t strictly property insurance related, for Florida’s legal system the fact trial lawyers have filed a record 280,122 lawsuits between March 1st and March 23rd, in order to beat the state’s tort overhaul, has the potential to be a concern.

That deluge of cases was 126.9% higher than the previous record in May of 2021, the Florida Bar said.

Triple-I explains, “These lawyers see the writing on the wall. The days of outsized legal fees from filing frivolous claims against insurance providers are over.”

But adds, “This last-ditch effort by trial lawyers will likely further delay consumers from benefiting from the new reforms as the load of cases slowly makes its way through Florida’s court system.”

In fact, the Triple-I predicts that this deluge of Florida lawsuits could “create a historic backlog” and as a result this could ensure that “insurers shell out billions of dollars in legal fees for the foreseeable future.”

This would “further threaten Florida’s weakened insurance market,” the Triple-I believes, a market that currently still sees as many as 24 insurers facing the risk of insolvency.

“This will make it even harder for Florida’s insurance market to stabilize, which was the intent of the reforms in the first place,” the organisation explains.

A destabilised Florida insurance market can pressure already-weakened insurers, drive additional costs through the system, while also resulting in further reinsurance pressures as the perception of the health of Florida’s primary insurers may take longer to improve.

It’s expected that many of these legal cases would normally have been denied, or settled pre lawsuit, but given the tort reform deadline lawyers have sought to file cases to protect their clients.

One of the Senate sponsor of the tort reform law, Palm Coast Republican Travis Hutson, commented, “I think it proves to us that the system is kind of broken and we need to reform it. You’re seeing all these lawsuits being filed now and it’s going to shock the system for a little bit, but eventually it will work itself out and we’ll be able to move forward under the new provisions.”

There’s no visibility of how many cases were filed that are relevant to Florida’s property insurance marketplace. But we’re told that the industry should expect that cases related to property carriers will be among them and there may have been a flurry of lawsuits filed in relation to last year’s hurricane Ian as well.

Time will tell how those work through the system and whether this legal backlog creates any challenges through the rest of 2023.

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