Insurance Companies No Longer Want To Pay Your Attorneys Fees

Lockewood Burt (left), Amy Briggs (middle), Chip Merlin (right)

Lockewood Burt (left), Amy Boggs (middle), Chip Merlin (right)

On October 15th, 2019, Florida’s Senate Committee on Banking and Insurance held a meeting in Tallahassee in order to discuss why there are still 17,000 open Hurricane Michael claims and what could be done to get them closed sooner.

The President of Security First Insurance Company, W. Lockwood (Locke) Burt, argued for litigation reform saying insurance companies are barely making profits because of all of the legal fees they are having to pay to homeowners attorneys. Mr. Burt complained that attorneys view the damages from Michael as a “gold rush” for themselves. He argued that “an attorney can get an unlimited amount of money for suing a property insurance company in Florida”. Burt warns that “rates are going to increase by 20% to 30% next year” because of the litigation costs insurance companies are having to pay.

However, others speaking on behalf of many of the 17,000 homeowners whose Hurricane Michael claims are still not resolved almost a year later, Chip Merlin and Amy Boggs argued that policyholders are not looking to sue insurance companies because “they want to” – they are suing their insurance companies because they “have to” in order to get claims paid. Amy Boggs states that more often than not, once a lawsuit is filed, she’s able to get her client’s insurance claim paid faster with the insurance company’s attorney than she would when dealing with the insurance company’s adjuster. Chip Merlin says, “the number one problem going on is that there is not a sufficient number of adjusters with authority to make significant payments immediately after the storm.” He further states that homeowners are having to wait months because adjusters must seek authority from their insurance company to make payments. In summary, they both argue that because insurance companies delaying on making payments on valid claims, denying claims, or underpaying claims is what is causing litigation. Amy goes on to state that the insurance companies’ litigation costs are a “self-inflicted wound” because they choose to delay payments, not to pay covered claims, and underpay insurance claims.  If you’re interested in watching the entire meeting, you can watch it here.  

Does the insurance company pay my attorney’s fees?

Short answer: yes, if you win or settle.

Before the statute was in place, very little prevented insurance companies from litigating indefinitely or long enough to cause policyholders dismiss their cases. Obviously, this was a problem for policyholders which prompted the legislature to enact this statute. Since then, the statute has provided a leveled playing field for both the policyholder and insurance company by allowing the policyholder to hire an attorney in order to resolve insurance disputes in court.

Generally, if a policy holder must file a lawsuit against their insurance company and they win or settle their case, their insurance company must pay the policyholder’s reasonable attorney’s fees and costs. This comes from Florida Statute 627.428.

627.428  Attorney’s fee.

(1)  Upon the rendition of a judgment or decree by any of the courts of this state against an insurer and in favor of any named or omnibus insured or the named beneficiary under a policy or contract executed by the insurer, the trial court or, in the event of an appeal in which the insured or beneficiary prevails, the appellate court shall adjudge or decree against the insurer and in favor of the insured or beneficiary a reasonable sum as fees or compensation for the insured’s or beneficiary’s attorney prosecuting the suit in which the recovery is had.

Please note that this statute only applies when you win. Therefore, if you are not successful settling or winning your lawsuit, your insurance company will not pay your attorneys fees or costs. There are other ways insurance companies can protect themselves from having to pay fees like making a proposal for settlement which is another blog entry for another time.

Unsurprisingly, people working for insurance companies, like Security First Insurance Company’s President, W. Lockwood Burt, are seeking to change the statute in order to limit the way policyholders can have their attorney’s fees paid.

If you believe that the statute for attorney’s fees is there to protect you when having to file a lawsuit against your insurance carrier, you should let your Senators on the Banking and Insurance committee know, and here’s how to contact them:

Chair: Senator Doug Broxson (R)

Vice Chair: Senator Darryl Ervin Rouson (D)

If you would like to donate to get involved with organizations who are fighting to enact legislation in favor of Florida Policyholders please consider checking out or donating to:

  • Florida Policyholder Cooperation strives to ensure that multibillion dollar insurance companies are held accountable for performing the duties and responsibilities owed to their policyholders regardless of the size of their claim or their socioeconomic status. Their goal is to raise money to support legislative actions which support the interests of Florida policyholders.

There are over 150 property insurance companies in Florida who want to change this statute; but there are over 6 million households who are better served keeping the statute as is.

 

 

 

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Erik Tyler Barnard, born and raised in Miami, Florida, is passionate about Insurance Law. Since 2015, Erik has played a critical role in several trials where he, alongside the talented trial attorneys at Barnard Law Offices, L.P., has recovered millions of dollars for homeowners where their insurance claims have been wrongfully denied or underpaid.
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