November 15, 2023
September 10, 2022
How Does Florida State Bill 2D Impact Homeowners and Their Roofs?
Due to Florida’s unique challenges, property insurance is a contentious subject in the state. In May of 2022, Florida adopted a pivotal piece of legislation that directly affected property insurers and homeowners. The House passed Florida Insurance Reform Law 2B-2D, more colloquially known as Florida State Bill 2D. Then, Governor Ron Desantis signed it into law. Read on to learn the details of the bill and what it means for homeowners moving forward.
What Are the Details of State Bill 2D?
Until recently, roofing contractors leveraged assignment of benefits (AOBs) contracts to gain third-party authority over their customers’ homeowners’ insurance claims for roof damage. AOBs gave roofing contractors the legal right to file claims and collect insurance payments without their customers’ involvement. Additionally, these AOBs gave the contractor leverage to sue the property insurer to maximize profit on jobs. AOBs aren’t inherently nefarious but are frequently abused. AOB abuse negatively impacts homeowners and property insurers.
Now, under the new legislation, attorney fees are no longer recoverable for contractors and it’s become increasingly more difficult for contractors to abuse AOBs. The following are the primary characteristics of State Bill 2D.
- Reinsurance to assist policyholders
- Reduction of homeowner vulnerability to hurricane damage through state-funded mitigation inspections
- Prohibits contractors from soliciting roof claims unless it’s a situation where the consumer is responsible for its payment or deductible
- Separate roof deductibles
- Insurer claims handling
What Does State Bill 2D Mean for Florida Homeowners Moving Forward?
The goal of the new bill is to alleviate these 2 primary burdens for Florida homeowners.
- Rising insurance costs
- Frivolous lawsuits between contractors and insurers
1. Rising Insurance Costs
Insurance companies were forced to increase premiums for Florida homeowners due to the combination of frequent hurricanes and the rise in frivolous lawsuits. Not only have costs increased, but obtaining insurance on roofs as young as 10 years of age has also become increasingly difficult.
Even in cases where new homeowners were able to obtain property insurance when they initially purchased their property, some insurance companies gave ultimatums by contacting them 6 months to 1 year later to let them know they’re canceling their policy. Homeowners would lose their coverage unless they replaced their roofs within 60-90 days.
2. Frivolous Lawsuits Between Contractors and Insurers
With the abuse of AOBs, contractors forced insurance companies to either settle inflated claims outside of court or refute the claim and battle it out legally. In cases where the insurer wasn’t forced to pay the contractor, the insured homeowner was on the hook to pay the cost of an inflated claim or face getting a lien placed on their property.
Moreover, if the contractor was unsuccessful in a legal case against the property insurer, they weren’t responsible for whatever legal fees the insurance company incurred. Further, the insurer was required to pay the full cost of the claim plus the contractor’s attorney fees if the contractor won the case.
The new legislation now addresses these gaps in Florida legislation. This alleviates many of the issues that have plagued insurers and homeowners in the state for decades.
Trust Big D for Your Roofing Needs in Ocala, FL
Big D Roofing has always prided itself on setting the standard in the roofing industry in Ocala, FL, and the surrounding area. We follow industry best practices and use high-quality roofing materials to give our customers beautiful roofs that will last.
Contact us today to get started on your residential roof repair or replacement.