Lisa Pate, FRSA Executive Director
One of the most contentious bills in the 2021 legislative session for the roofing industry was Senate Bill 76 (SB 76). Among other items, original versions of both the Senate bill (SB 76) and its House counterpart (HB 305) contained a reimbursement schedule for roof replacement after a 10-year life span, favoring one roofing system over another. FRSA’s opposition to the bill was multifaceted. We opposed an arbitrary 10-year roof lifespan and feel that the lifespan of most roofs exceeds 10 years (if properly installed) and that one roof system is not inherently better than others. We also opposed any language that provides for prorated roof claim reimbursement without some type of hurricane damage exclusion. Should a hurricane or severe weather event occur, the reimbursement schedule would have left properties unprotected and jeopardized the safety of those unable to afford necessary repairs.
As mentioned, the original bill language in both the House and the Senate included a sliding scale for replacement value of various roofing systems beginning at 70 percent and declining to as low as 25 percent. FRSA Legislative Counsel, Chris Dawson, reached out to both bill sponsors, Senator Jim Boyd and Representative Bob Rommel and offered to work with them to revise language, making it more user-friendly for roofing contractors. FRSA also engaged House leadership and Senator Keith Perry to request changes to the bills. Mike Silvers, CPRC, FRSA Technical Director, assisted Chris with technical and code language and offered an alternative to the reimbursement schedule by proposing a material- neutral option or a yearly depreciation option that would have extended the roof life reimbursement in the schedule to 20 years. Chris successfully lobbied the House to eliminate the reimbursement schedule completely. Thereafter, an FRSA-led coalition including the Associated Builders and Contractors of Florida, the Florida Homebuilders Association and the Florida Realtors advocated within both the House and the Senate for support of the House bill as amended in FRSA’s favor.
Mike reached out to industry associations: Tile Roofing Industry Alliance (TRI), Asphalt Roofing Manufacturers Association (ARMA), EPDM Roofing Association (ERA), National Roofing Contractors Association (NRCA) and the Cedar Shake and Shingle Bureau (CSSB) for support. They immediately came to our aid and wrote letters to Florida legislators supporting our position and an industry coalition was born. Over a few short weeks, leaders from each group participated on calls and group emails, contacting
Representatives to support House Bill 305. It was truly amazing how quickly the industry banded together to oppose bad insurance industry language. Our thanks to our industry partners for their support and to Craig Brightup, The Brightup Group, for assisting Chris and drafting language to support our position.
After several amendments, most notably the removal of the reimbursement schedule, SB 76 passed in a form largely identical to HB 305 as earlier amended in FRSA’s favor during the final hours of session. If Governor DeSantis signs the bill, it will go into effect on July 1.
There are other provisions in the bill upon which contractors should exercise caution. Offering a residential property owner a rebate gift, gift card, cash, coupon, waiver of any insurance deductible or any other thing of value in exchange for allowing the
contractor to conduct an inspection of the roof is prohibited. So it’s not banning a roofer from doing an inspection, it’s outlawing a roofer from providing an incentive or a gift to the homeowner in exchange for permission to perform a roof inspection. The bill prohibits contractors and persons acting on behalf of contractors, from:
■ Soliciting residential property owners through prohibited advertisements, which are communications to a consumer that encourage, instruct or induce a consumer to file an insurance claim for roof damage;
■ Offering the residential property owner consideration to perform a roof inspection or to file an insurance claim;
■ Offering or receiving consideration for referrals when property insurance proceeds are payable;
■ Unlicensed public adjusting, and
■ Providing an authorization agreement to the insured without providing a good faith estimate.
The above acts are subject to license discipline by the Department of Business and Professional Regulation (DBPR) and a $10,000 fine per violation. The bill provides that the residential property owner may void the contract with the contractor within 10 days of its execution if the contractor fails to provide notice to the residential property owner of these contractor prohibited practices.
The bill prohibits licensed contractors and subcontractors from advertising, soliciting, offering to handle, handling or performing public adjuster (PA) services without a license. The bill does not prohibit the contractor from recommending that the consumer
consider contacting his or her insurer to determine if the proposed repair is covered by insurance.
The bill prohibits a PA, PA apprentice or person acting on behalf of a PA or PA apprentice, from offering financial inducements for allowing a roof inspection of residential property or making an insurance claim for roof damage. The bill also prohibits them from offering or accepting consideration for referring services related to a roof claim. Each violation subjects the PA or PA licensee to up to a $10,000 fine. Unlicensed persons not otherwise exempted from PA licensure commit the unlicensed practice of public adjusting when they do these prohibited acts and are subject to a $10,000 fine per act and the criminal penalty for unlicensed
activity.
The bill provides that a personal lines residential risk seeking to be newly insured by Citizens Property Insurance Corporation (Citizens) is ineligible for coverage if it receives an offer of comparable coverage from an authorized insurer that is not more than 20 percent higher than the Citizens premium, rather than the current 15 percent eligibility threshold for new policyholders.
The bill increases the 10 percent cap (the “glide path”) on Citizens’ rate increases by one percent annually beginning in 2022, until the cap reaches 15 percent in 2026. The bill specifies that Citizens’ rate calculations must include the cost of reinsurance to cover its projected 100-year probable maximum loss, even when Citizens does not purchase reinsurance.
The bill requires that Citizens’ budget allocations for employee compensation and all proposed raises for an employee exceeding 10 percent of their current salary must be approved by the Citizens Board of Governors, along with an overall employee compensation
plan.
The bill specifies a property insurance claim or reopened claim must be provided to the authorized or surplus lines insurer within two years of the date of loss. A supplemental claim is barred unless notice is provided to the insurer within three years after the
date of loss. The bill clarifies that the date of loss for claims resulting from hurricanes, tornadoes, windstorms, severe rain or weather-related events is the date a hurricane makes landfall or when the tornado, windstorm, severe rain or another type of weather-related event is verified by the National Oceanic and Atmospheric Administration (NOAA).
The bill creates a framework for all suits not brought by an assignee arising under a residential or commercial property insurance policy, including surplus lines policies.
A claimant must provide the Department of Financial Services (DFS) with written notice of intent to initiate litigation at least 10 business days before filing suit. The notification must be made on a form provided by DFS and may not be given before the earlier
of the insurer’s denial of coverage or the expiration of the 90-day period to adjust a claim under section 627.70131, F.S. The notice must detail the alleged acts or omissions of the insurer giving rise to the suit. If the insurer denied coverage, the notice must include an estimate of damages. If the insurer did not deny coverage, notice must include a presuit settlement demand that itemizes damages, attorney fees, costs and the disputed amount. The notice may include supporting documents. The notice and supporting documents are admissible only in a proceeding regarding attorney fees. A court must dismiss without prejudice any
claimant’s suit if the claimant has not complied with the requirement to provide 10 business days’ notice of intent to initiate litigation.
The insurer must respond in writing within 10 business days after receiving notice of intent to initiate litigation. If the insurer denied coverage, the insurer must either accept coverage, deny coverage or assert the right to re-inspect the property within 14 business days. If the notice alleges the insurer did an act other than denying coverage, the insurer must respond by making a settlement offer or requiring the claimant to participate in an appraisal or another method of alternative dispute resolution (ADR). If appraisal or ADR is not concluded within 90 days after the 10-day notice of intent to initiate litigation, the claimant may immediately file suit.
The bill provides that, for lawsuits under surplus lines and authorized residential and commercial property insurance policies not brought by an assignee, attorney fees may only be awarded using the methodology created by the bill or when the court imposes
sanctions under section 57.105, F.S. Accordingly, claimants may no longer obtain attorney fees under section 627.428, F.S., or section 626.9373, F.S., nor may insurers recover attorney fees using an offer of judgment under s. 768.79, F.S.
Attorney fees and costs are awarded based on a formula that compares the amount obtained by the claimant in excess of the insurer’s presuit settlement offer (exclusive of attorney fees and costs) with the disputed amount between the two parties (the difference between the claimant’s presuit settlement demand and the insurer’s presuit settlement offer, also exclusive of attorney fees and costs). If the amount obtained by the claimant in excess of the insurer’s presuit settlement offer is:
■Less than 20 percent of the disputed amount, each party pays its own attorney fees and costs.
■ At least 20 percent but less than 50 percent of the disputed amount, the insurer pays the claimant’s attorney fees equal to the percentage of the disputed amount obtained times the total attorney fees and costs.
■ At least 50 percent of the disputed amount, the insurer pays the claimant’s full attorney fees and costs.
FRSA continues to work for the industry through legislative, legal and building code review and reform. If you are not an FRSA Member, we invite you to join and see what other benefits we offer. Please contact Maria Armas, Membership Director at 800-767-3772 ext. 142 or by email at maria@floridaroof.com.
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