In 2023, the Florida Legislature made a catastrophic mistake that’s now hurting 1000’s of Floridians. They handed Residents Property Insurance coverage Company — our state-run insurer of final resort — the flexibility to pressure policyholders into administrative arbitration on the Division of Administrative Hearings (DOAH) as an alternative of letting disputes be determined by a jury of their friends. The outcomes have been precisely what shopper advocates warned about: A whole, one-sided sham course of the place Residents wins 100% of the time.
Background: How Residents Was Created
Residents was fashioned in 2002. The Florida Legislature merged two state entities into a brand new government-run insurer: Residents Property Insurance coverage Company. The mission was easy: present insurance coverage to policyholders who couldn’t discover it elsewhere. Residents was by no means presupposed to compete with personal insurers or exploit customers. It was meant to be a security web — nothing extra. Quick-forward 20 years, and Residents has morphed into an enormous, highly effective entity with over 1,000,000 insurance policies, political muscle in Tallahassee, and a monitor report of aggressively denying and underpaying claims with impunity as a result of it isn’t topic to any unfair claims follow or dangerous religion lawsuits.
How DOAH Arbitration Got here Into Play
Residents executives conceived of a plan that as an alternative of letting disgruntled policyholders take them to court docket — the place a jury would possibly award truthful damages — Residents wished to tug disputes right into a government-run administrative system. Authorities administrative judges would rule on a authorities entity about how a lot was owed beneath the coverage.
Right here is how they pulled it off: On February 1, 2023, Residents quietly rolled out a brand new coverage endorsement permitting both occasion to demand arbitration by way of DOAH. The Workplace of Insurance coverage Regulation (OIR) authorised the brand new types, however that approval was not sufficient. Residents’ authority comes strictly from statute, and nothing in current regulation explicitly allowed DOAH arbitration. In Could 2023, the Florida Legislature handed new laws to provide Residents express statutory authority to make use of DOAH arbitration, shielding this system from authorized challenges.
On the time, Residents bought the thought to Florida’s legislators and promised that DOAH arbitration could be quicker, cheaper, and truthful for everybody. Different policyholder attorneys and I warned legislators that it was a lure. We warned that it could strip policyholders of the fitting to a impartial discussion board and stack the deck in Residents’ favor.
In a publish, Will Residents Property Insurance coverage Disputes Be Dealt with By Authorities Administrative Judges, I warned concerning the following:
Florida’s chief in robust claims dealing with and policyholder abuse is Residents Property Insurance coverage. It’s immune from accountability to Florida Statutes concerning wrongful claims dealing with conduct. Like a thief with no legal guidelines in opposition to theft, Residents can do what it needs and never be liable to the sufferer. Now, Residents Property needs extra safety from accountability to contract obligations by sending its claims disputes to Florida’s administrative courts.
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That is one other means folks lose rights. Governments have traditionally wished their very own authorities judges to determine issues—governments don’t belief juries. Residents will argue that the contractual obligations mandate this state of affairs, as if the policyholder had any say within the coverage language which disposes of an individual’s proper to a jury trial.
I spoke out in opposition to this regulation once more on behalf of the Florida Justice Affiliation simply two weeks in the past. I testified to the Florida Home Insurance coverage and Banking Subcommittee that the regulation ought to by no means have been handed in 2023, and that Residents ought to by no means have been granted this means to keep away from accountability in entrance of a jury.
New statistics show we have been proper.
The Brutal Actuality: Residents Steamrolls Policyholders
An evaluation of roughly 890 DOAH arbitration circumstances involving Residents reveals a devastating sample. Residents has gained one hundred pc of circumstances. Zero arbitration awards have been rendered in favor of policyholders. DOAH arbitration has resulted in no cash awards to policyholders. A pattern of the evaluation is hooked up.
In a minimum of six circumstances, Residents was awarded charges and prices even when the policyholder voluntarily withdrew their claims.
This isn’t a good or balanced system. It’s legalized bullying. The executive regulation judges at DOAH — appointed by the state — are put within the place of deciding circumstances involving a government-created insurer. The bias could also be unconscious, however the outcomes are unmistakable. Policyholders don’t stand an opportunity. As soon as Residents calls for DOAH arbitration, the combat is over earlier than it begins.
Why This Course of Should Be Abolished — Instantly
The 2023 laws created a rigged system that Residents has weaponized in opposition to Florida’s owners. Policyholders have been stripped of their constitutional proper to a jury trial, dragged into an administrative discussion board stacked in opposition to them, and punished for merely asserting their rights. The statistics don’t lie.
When one facet wins one hundred pc of the time, and policyholders are getting slammed with authorized charges even once they withdraw, the system is damaged past restore. The Legislature created this catastrophe. They have to repair it — proper now, through the present legislative session.
It’s time to abolish Residents’ DOAH arbitration authority. Restore Floridians’ proper to take their disputes to an actual court docket, in entrance of an actual jury. Something much less is a betrayal of the owners the Legislature is meant to guard. Sufficient is sufficient.
I need to give an enormous shout-out to policyholder legal professional Michael Fischetti, who ready this evaluation. Michael is a contender in my ebook as a result of not solely has he spoken out about this wrongful regulation and unfair dispute decision follow, he took motion and made this very priceless evaluation proving the purpose. The world wants extra contenders and never social media pretenders.
Thought For The Day
“Each time we flip our heads the opposite means once we see the regulation flouted, once we tolerate what we all know to be flawed, once we shut our eyes and ears to the corrupt as a result of we’re too busy, or too frightened, once we fail to talk up and communicate out, we strike a blow in opposition to freedom and decency and justice.”
—Robert F. Kennedy