TALLAHASSEE — Floridians are paying the highest auto and homeowners insurance premiums in the nation — and those rates continue to rise.

Saying they want to drive down costs, Tallahassee lawmakers are working to limit policyholders’ abilities to sue their insurance companies.

After years of legislation limiting lawsuits against property insurance companies, Gov. Ron DeSantis and Republican leaders are preparing to spread those limits to other lines of insurance, such as automobile, life, liability and health.

The changes would make it riskier for lawyers to take cases against insurance companies and make insurance companies pay less in injury cases. Some of the changes overturn 130-year-old law meant to give the policyholder more of a level playing field against their insurer.

Business groups and insurance companies have argued for years that frivolous litigation amounts to a “tort tax” on citizens. They point to billboard attorneys and the high rate of litigation in the state. A lobbyist for State Farm said recently that Florida made up 99% of the company’s auto glass-related lawsuits, for example.

But there is little evidence that auto, life and health insurance companies have been suffering. The industry is highly profitable. Last year, insurance companies, executives and their agents contributed more than $7 million to legislators, DeSantis and business groups, such as the Florida Chamber of Commerce.

Trial lawyers have come out strongly against the legislation, naturally. So have a variety of others, including bikers, doctors and accident victims, who have packed committee rooms in the Capitol.

The issue has also split small businesses and key GOP lawmakers. Two Republican senators balked at the proposals last week, saying they went too far.

Lawmakers also question whether limiting lawsuits will actually reduce insurance rates. They point to the fact that homeowners’ rates continue to rise, despite making it much harder to sue them.

“Did my rates go down?” Rep. Mike Beltran, R-Riverview, said last week. “No, my rates did not go down.”

Measures have DeSantis’ support

Lawmakers are fast-tracking two bills that would reshape the legal environment.

House Bill 837, one of the priorities of House Speaker Paul Renner, R-Palm Coast, and Senate Bill 236 are still being amended, but they already have the support of DeSantis and Senate President Kathleen Passidomo, R-Naples.

DeSantis said he hasn’t told the Legislature what to do, just to be “as ambitious as you can.”

“Clearly, when you look at how our legal system is set up, it is designed in the state of Florida to invite litigation rather than invite settlement,” DeSantis said.

One of the ways lawmakers want to limit litigation is to eliminate what’s known as the one-way attorney fee statute against all insurance companies, not just those that offer homeowners insurance.

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Since insurance companies draw up the terms of the contract, state law leveled the playing field by requiring insurance companies to pay the policyholder’s attorney’s fees in the event of a successful lawsuit. In other words, if the policyholder has to sue to get the insurance company to hold up their end of the bargain, and the policyholder wins, the insurance company has to pay their attorney’s fees.

Republican lawmakers want to do away with that law, which dates to the 1890s. Under the proposed legislation, the policyholder would be responsible for paying their own attorney’s fees, either through paying a lawyer’s hourly rate — which few can afford — or by paying a lawyer through a contingency fee, which is usually 30% to 40% of whatever the policyholder wins.

Lawyers say they would be much less likely to take cases against insurance companies — which would make the companies less likely to pay claims.

“If there’s no repercussions for an insurance company to deny coverage, they’re going to deny everything,” said attorney Steve Barnes, president of the Tampa Bay Trial Lawyer’s Association.

Another change would limit how much a plaintiff would collect in a lawsuit.

For example, in a negligence lawsuit — like a traffic crash between two motorists — a jury calculates the amount of blame between the plaintiff and defendant. If the jury determines the plaintiff was 30% to blame in a crash with $100,000 in damages, the plaintiff would collect 70%, or $70,000.

Under HB 837, if the jury finds that the plaintiff was more than 50% at fault, the plaintiff would collect nothing.

Motorcycle riders have protested the idea, since they could be found more than 50% at fault for suffering brain injuries in an accident for not wearing a helmet, although helmets are not required in Florida.

Issue splits Republicans

The legislation would also place caps on how much an accident victim could be reimbursed for their medical bills.

Under the legislation, juries would only be allowed to see the plaintiff’s insurance company’s negotiated rate for services, not the actual medical bills or whatever bills that may have been negotiated between doctors and lawyers.

Plaintiffs without insurance — about 12% of Florida’s population — would only be reimbursed for medical costs at 140% of the Medicaid rate under HB 837. (The Senate bill’s rate is higher.)

That would not be enough money to recover from injuries, said Gary Miracle Jr., 41, of Rockledge. Miracle told lawmakers he was treated at a hospital for flu-like symptoms when he had strep throat. He fell into septic shock and into a coma and left the hospital a quadruple amputee. Miracle sued the hospital, reaching a settlement, court records show.

If he’d been uninsured, the Medicaid rate wouldn’t have been able to pay for the prosthetic legs he uses today, he said.

“I would have a stick on a foot according to what this is going to (do),” Miracle told a Senate committee. “If I was your son, if I was your daughter, there’s no way that you would be OK with this money.”

One part of the bill that caused two key Republican senators to balk addresses what is known as “bad faith.”

In Tampa, the local owner of several Pinch A Penny pool supply stores was sued after an employee at one of its franchised locations drove a company truck while drunk and crashed on Bayshore Boulevard, killing a pedestrian.

The Pinch a Penny franchise owner had $2 million in liability coverage through its insurance carriers, but the family of the pedestrian sued after they said the automobile insurance carrier hadn’t made a settlement offer. A jury awarded $17.5 million in damages last year.

In February, Pinch A Penny’s franchise owner sued its insurer, claiming the company acted in bad faith by not trying to quickly settle a case in which the driver was obviously at fault. In a filing, it said it’s already been forced to sell two stores at auction prices and is looking to sell a third. The insurer hasn’t yet responded.

There are relatively few bad-faith lawsuits against insurers — only a handful of lawyers in Florida specialize in it, and they file at most a dozen cases a year, attorneys say. But the judgments can be tens of millions of dollars, and under state law, companies are forbidden from passing the cost along to policyholders.

The legislation would make several changes to the bad-faith rules, including making it impossible to sue insurers for acting in bad faith if they make a settlement offer within 120 days. (The Pinch A Penny owner was sued after 100 days.)

Sen. Jay Trumbull, R-Panama City, who has a bottled water company, and Sen. Nick DiCeglie, R-St. Petersburg, who has a sanitation business, said the changes to the bad-faith rules would put their businesses at risk.

“Whether it’s me or any other small-business owner, there’s a chance that that leads to bankruptcy,” DiCeglie said. “And I don’t think that anyone on this committee in the Senate is going to be acceptable with that unintended consequence.”

Insurance companies profitable

The National Federation of Independent Business, the Florida Chamber of Commerce and other business groups are lobbying hard for the changes, pointing to the high number of lawsuits in Florida. The changes lawmakers are proposing have been adopted in many other states.

“You’ve got to admit, no matter what side of the argument you’re on, that whether you call it frivolous litigation, meritless litigation or just excessive, that it’s a drag on Florida, and something’s got to change,” said Rep. David Smith, R-Winter Springs.

But it’s unclear what the financial toll of that litigation has been on businesses.

In 2020, the American Tort Reform Association, which is funded by corporations, removed Florida from its list of “judicial hellholes” thanks to business-friendly justices appointed by DeSantis to the state Supreme Court, according to the organization.

Aside from Florida-based property insurers, the insurance companies remain highly profitable. The insurer in the Pinch A Penny bad-faith case is owned by Berkshire Hathaway, which made $6.7 billion in profits last quarter and spent about as much buying back its own stock last year.

Health insurance companies have seen profits soar by managing Medicare Advantage plans. Auto insurers made nearly $30 billion in profit in 2020, according to the Consumer Federation of America, and they spend billions each year in advertising.

Since 2010, insurance companies, executives and agents have donated at least $74 million to Florida politicians or business groups, a Times/Herald analysis shows. The Republican Party of Florida was by far the top individual recipient, at $19 million. DeSantis was the top individual recipient, at $3.3 million, including a $150,000 one-day haul from State Farm agents last year, Politico reported. Florida Chief Financial Officer Jimmy Patronis, whose office regulates insurance companies, has received nearly $2 million.

Lawmakers have done no in-depth studies of the state’s property insurance or auto insurance markets in recent years. The state started collecting data from property insurers about their litigated claims only this month and has yet to produce the results.

The frustration boiled over for some lawmakers this week, who openly questioned how many of the lawsuits are actually frivolous.

“Grow a backbone and defend the cases, and don’t pay frivolous cases, and don’t raise my insurance rates,” Beltran said.

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