Florida Senate - 2025 SB 1508 By Senator Leek 7-00638B-25 20251508__ 1 A bill to be entitled 2 An act relating to property insurance claims; amending 3 s. 627.7015, F.S.; establishing a mandatory procedure 4 for resolution of disputed insurance claims; deleting 5 the alternative procedure for resolution of disputed 6 insurance claims; providing legislative intent and 7 purpose; requiring certain entities to administer a 8 specified law in a certain manner; requiring insurers, 9 at specified times, to notify policyholders of the 10 mandatory procedure; requiring the Department of 11 Financial Services to prepare a consumer information 12 pamphlet to be provided to policyholders at a 13 specified time; authorizing a policyholder to file 14 with the Division of Administrative Hearings a 15 petition to resolve claims; specifying requirements 16 for the filing and service of such petition; requiring 17 the administrative law judge to review the petition 18 and dismiss certain petitions; requiring that the 19 petition include a certain certification; specifying 20 that a dismissal of the petition or a portion of the 21 petition is without prejudice and does not require a 22 hearing; requiring the insurer to pay the requested 23 claim or file a response to the petition in a 24 specified timeframe; specifying filing and content 25 requirements for the petition; requiring the 26 administrative law judge to conduct proceedings in a 27 specified manner; providing an exception; requiring 28 the administrative law judge to make a final 29 determination of total coverage within a specified 30 timeframe; revising the definition of the term 31 claim; repealing ss. 627.70151, 627.70152, 32 627.70153, and 627.70154, F.S., relating to appraisal 33 clauses in property insurance contracts, suits arising 34 under a property insurance policy, consolidation of 35 residential property insurance actions, and mandatory 36 binding arbitration of property insurance policies, 37 respectively; creating s. 627.7156, F.S.; specifying 38 that the homeowners insurance policy insurer is the 39 primary insurer under certain circumstances; requiring 40 such insurer to pay the insureds loss according to 41 specified terms; providing such insurer with the right 42 to seek subrogation; amending ss. 627.351, 627.70131, 43 and 627.7074, F.S.; conforming provisions to changes 44 made by the act; providing an effective date. 45 46 Be It Enacted by the Legislature of the State of Florida: 47 48 Section 1.Section 627.7015, Florida Statutes, is amended 49 to read: 50 627.7015Mandatory Alternative procedure for resolution of 51 disputed property insurance claims. 52 (1)This section sets forth a nonadversarial alternative 53 dispute resolution procedure for an a mediated claim resolution 54 conference prompted by the need for effective, fair, and timely 55 resolution handling of property insurance claims. There is a 56 particular need for a mandatory an informal, nonthreatening 57 forum, available at the election of either party, for helping 58 parties who elect this procedure to resolve their claims 59 disputes regarding because most homeowner and commercial 60 residential insurance policies obligate policyholders to 61 participate in a potentially expensive and time-consuming 62 adversarial appraisal process before litigation. The procedure 63 set forth in this section is designed to bring the parties 64 together to ensure the efficient delivery of the coverage 65 offered under the policy, helping to restore an owners property 66 and livelihood to normalcy after a disaster or loss, while 67 maintaining reasonable costs to the insurer for a mediated 68 claims settlement conference without any of the trappings or 69 drawbacks of an adversarial process. Before participating in 70 resorting to these procedures, policyholders and insurers are 71 encouraged to resolve claims as quickly and fairly as possible. 72 The department, the office, and the Division of Administrative 73 Hearings shall administer this section in a manner that 74 facilitates the self-execution of the system and the process of 75 ensuring a prompt and cost-effective delivery of payments to 76 insureds This section is available with respect to claims under 77 personal lines and commercial residential policies before 78 commencing the appraisal process , or before commencing 79 litigation. Mediation may be requested only by the policyholder, 80 as a first-party claimant, a third-party, as an assignee of the 81 policy benefits, or the insurer. However, an insurer is not 82 required to participate in any mediation requested by a third 83 party assignee of the policy benefits. If requested by the 84 policyholder, Participation by legal counsel is permitted but is 85 not required. Expert testimony may be used in the procedure, 86 regardless of whether legal counsel is participating. Mediation 87 under this section is also available to litigants referred to 88 the department by a county court or circuit court. This section 89 does not apply to commercial coverages, to private passenger 90 motor vehicle insurance coverages, or to disputes relating to 91 liability coverages in policies of property insurance. 92 (2)At the time of issuance and renewal of a policy or at 93 the time a first-party claim within the scope of this section is 94 filed by the policyholder, the insurer shall notify the 95 policyholder of the mandatory procedure its right to participate 96 in the mediation program under this section. A claim becomes 97 eligible for mediation after the insurer complies with s. 98 627.70131(7) or elects to reinspect pursuant to s. 99 627.70152(4)(a)3. If the insurer has not complied with s. 100 627.70131(7) or elected to reinspect pursuant to s. 101 627.70152(4)(a)3. within 90 days after notice of the loss, the 102 insurer may not require mediation under this section. This 103 subsection does not impair the right of an insurance company to 104 request mediation after a determination of coverage pursuant to 105 this section or require appraisal or another method of 106 alternative dispute resolution pursuant to s. 627.70152(4)(b). 107 The department shall prepare a consumer information pamphlet for 108 distribution to be provided to policyholders at the time of 109 issuance and renewal of the policy and upon the Governors 110 declaration of a state of emergency within the policyholders 111 county persons participating in mediation. 112 (3)Any policyholder may, for any claim that is ripe, due, 113 and owing, file with the Division of Administrative Hearings a 114 petition to resolve claims which meets the requirements of this 115 section. A policyholder represented by an attorney shall file by 116 electronic means. A policyholder not represented by an attorney 117 may file by certified mail or by electronic means. The 118 department shall inform policyholders of the location of the 119 Division of Administrative Hearings and the divisions website 120 address for purposes of filing a petition for resolving a claim. 121 The policyholder shall also serve copies of the petition to 122 resolve claims by certified mail, or by electronic means, upon 123 the insurer. The costs of the procedure mediation must be 124 reasonable, and the insurer must bear all of the cost of 125 conducting mediation conferences, except as otherwise provided 126 in this section. If a policyholder fails to appear at the 127 conference, the conference must be rescheduled upon the 128 policyholders payment of the costs of a rescheduled conference. 129 If the insurer fails to appear at the conference, the insurer 130 must pay the policyholders actual cash expenses incurred in 131 attending the conference if the insurers failure to attend was 132 not due to a good cause acceptable to the department. An insurer 133 will be deemed to have failed to appear if the insurers 134 representative lacks authority to settle the full value of the 135 claim. The insurer shall incur an additional fee for a 136 rescheduled conference necessitated by the insurers failure to 137 appear at a scheduled conference. The fees assessed by the 138 department must include a charge necessary to defray the 139 expenses of the department related to its duties under this 140 section and must be deposited in the Insurance Regulatory Trust 141 Fund. The department may suspend the insurers authority to 142 appoint licensees if the insurer does not timely pay the 143 required fees. 144 (4)Upon receipt of the petition, the administrative law 145 judge shall review it and shall dismiss any petition or any 146 portion of such a petition which does not on its face 147 specifically identify or itemize all of the following 148 information: 149 (a)The policyholders name, address, telephone number, and 150 social security number. 151 (b)The insurers name, address, and telephone number. 152 (c)A detailed description of the loss or damage, including 153 the date it occurred. 154 (d)The alleged acts or omissions of the insurer giving 155 rise to the dispute, including, if applicable, a denial of 156 coverage. 157 (e)An estimate of damages, if known, and the amount that 158 is disputed by the insurer. 159 (f)A specific explanation of any other disputed issue that 160 the administrative law judge will be called to rule upon The 161 department shall adopt by rule a property insurance mediation 162 program to be administered by the department or its designee. 163 The department may also adopt special rules which are applicable 164 in cases of an emergency within the state. The rules shall be 165 modeled after practices and procedures set forth in mediation 166 rules of procedure adopted by the Supreme Court. The rules shall 167 provide for: 168 (a)Reasonable requirement for processing and scheduling of 169 requests for mediation. 170 (b)Qualifications , denial of application, suspension , 171 revocation of approval, and other penalties for mediators as 172 provided in s. 627.745 and the Florida Rules for Certified and 173 Court-Appointed Mediators. 174 (c)Provisions governing who may attend mediation 175 conferences. 176 (d)Selection of mediators. 177 (e)Criteria for the conduct of mediation conferences. 178 (f)Right to legal counsel. 179 (5)The petition must include a certification by the 180 policyholder or, if the policyholder is represented by counsel, 181 the policyholders attorney, stating that the policyholder, or 182 attorney if the policyholder is represented by counsel, has made 183 a good faith effort to resolve the dispute and that the 184 policyholder or attorney was unable to resolve the dispute with 185 the insurer All statements made and documents produced at a 186 mediation conference shall be deemed to be settlement 187 negotiations in anticipation of litigation within the scope of 188 s. 90.408. All parties to the mediation must negotiate in good 189 faith and must have the authority to immediately settle the 190 claim. Mediators are deemed to be agents of the department and 191 shall have the immunity from suit provided in s. 44.107. 192 (6)(a)The dismissal of any petition or portion of such a 193 petition under this section is without prejudice and does not 194 require a hearing Mediation is nonbinding; however, if a written 195 settlement is reached, the policyholder has 3 business days 196 within which the policyholder may rescind the settlement unless 197 the policyholder has cashed or deposited any check or draft 198 disbursed to the policyholder for the disputed matters as a 199 result of the conference. If a settlement agreement is reached 200 and is not rescinded, it is binding and acts as a release of all 201 specific claims that were presented in that mediation 202 conference. 203 (b)At the conclusion of the mediation, the mediator shall 204 provide a written report of the results of mediation, including 205 any settlement amount, to the insurer, the policyholder, and the 206 policyholders representative if the policyholder is represented 207 at the mediation. 208 (7)All motions to dismiss must be handled as specified in 209 s. 440.192(5) If the insurer fails to comply with subsection (2) 210 by failing to notify a policyholder of its right to participate 211 in the mediation program under this section or if the insurer 212 requests the mediation, and the mediation results are rejected 213 by either party, the policyholder is not required to submit to 214 or participate in any contractual loss appraisal process of the 215 property loss damage as a precondition to legal action for 216 breach of contract against the insurer for its failure to pay 217 the policyholders claims covered by the policy. 218 (8)Within 14 days after receipt of a petition to resolve 219 claims by certified mail or by electronic means, the insurer 220 must pay the requested claim or file a response to the petition 221 with the Division of Administrative Hearings. If the insurer 222 files a response to the petition, the response must be filed by 223 electronic means. Such response must specify all claims 224 requested but not paid and explain the insurers reason for 225 nonpayment. The insurer shall provide copies of the response to 226 the policyholder by certified mail or by electronic means. In 227 ruling on the petition and response to the petition, the 228 administrative law judge shall conduct proceedings in a manner 229 consistent with the process outlined in s. 440.25, except that 230 the administrative law judge shall make a determination within 231 60 days after the filing of the petition of the policyholders 232 coverage under the insurance policy. After determining coverage, 233 the administrative law judge shall make a final determination of 234 the total coverage amount within 180 days after the filing of 235 the petition, which must be paid to the policyholder or held in 236 escrow on the policyholders behalf until exhausted for covered 237 claims The department may designate an entity or person to serve 238 as administrator to carry out any of the provisions of this 239 section and may take this action by means of a written contract 240 or agreement. 241 (9)For purposes of this section, the term claim refers 242 to any dispute between an insurer and a policyholder relating to 243 a material issue of fact other than a dispute: 244 (a)With respect to which the insurer has a reasonable 245 basis to suspect fraud; 246 (b)When the insurer has determined, based on agreed-upon 247 facts as to the cause of loss, there is no coverage under the 248 policy; 249 (c)With respect to which the insurer has a reasonable 250 basis to believe that the policyholder has intentionally made a 251 material misrepresentation of fact which is relevant to the 252 claim, and the entire request for payment of a loss has been 253 denied on the basis of the material misrepresentation; 254 (d)With respect to which the amount in controversy is less 255 than $500, unless the parties agree to mediate a dispute 256 involving a lesser amount; or 257 (e)With respect to a loss that does not comply with s. 258 627.70132. 259 Section 2.Section 627.70151, Florida Statutes, is 260 repealed. 261 Section 3.Section 627.70152, Florida Statutes, is 262 repealed. 263 Section 4.Section 627.70153, Florida Statutes, is 264 repealed. 265 Section 5.Section 627.70154, Florida Statutes, is 266 repealed. 267 Section 6.Section 627.70156, Florida Statutes, is created 268 to read: 269 627.70156Coordination of payment of claims.If a claim is 270 submitted under a homeowners insurance policy and the insured 271 also has a separate windstorm or flood insurance policy, the 272 homeowners insurer is the primary insurer. Such insurer must 273 pay the insureds loss according to the terms of the homeowners 274 insurance policy and has the right to seek subrogation from the 275 windstorm or flood insurer. 276 Section 7.Paragraph (ll) of subsection (6) of section 277 627.351, Florida Statutes, is amended to read: 278 627.351Insurance risk apportionment plans. 279 (6)CITIZENS PROPERTY INSURANCE CORPORATION. 280 (ll)1.In addition to any other method of alternative 281 dispute resolution authorized by state law, the corporation may 282 adopt policy forms that provide for the resolution of disputes 283 regarding its claim determinations, including disputes regarding 284 coverage for, or the scope and value of, a claim, in a 285 proceeding before the Division of Administrative Hearings. Any 286 such policies are not subject to s. 627.70154. All proceedings 287 in the Division of Administrative Hearings pursuant to such 288 policies are subject to ss. 57.105 and 768.79 as if filed in the 289 courts of this state and are not considered chapter 120 290 administrative proceedings. Rule 1.442, Florida Rules of Civil 291 Procedure, applies to any offer served pursuant to s. 768.79, 292 except that, notwithstanding any provision in Rule 1.442, 293 Florida Rules of Civil Procedure, to the contrary, an offer 294 shall not be served earlier than 10 days after filing the 295 request for hearing with the Division of Administrative Hearings 296 and shall not be served later than 10 days before the date set 297 for the final hearing. The administrative law judge in such 298 proceedings shall award attorney fees and other relief pursuant 299 to ss. 57.105 and 768.79. The corporation may not seek, and the 300 office may not approve, a maximum hourly rate for attorney fees. 301 2.The corporation may contract with the division to 302 conduct proceedings to resolve disputes regarding its claim 303 determinations as may be provided for in the applicable policies 304 of insurance. This subparagraph expires July 1, 2025. 305 Section 8.Paragraph (a) of subsection (8) of section 306 627.70131, Florida Statutes, is amended to read: 307 627.70131Insurers duty to acknowledge communications 308 regarding claims; investigation. 309 (8)The requirements of this section are tolled: 310 (a)During the pendency of any mediation proceeding under 311 s. 627.7015 or any alternative dispute resolution proceeding 312 provided for in the insurance contract. The tolling period ends 313 upon the end of the proceeding mediation or alternative dispute 314 resolution proceeding. 315 Section 9.Subsection (3) of section 627.7074, Florida 316 Statutes, is amended to read: 317 627.7074Alternative procedure for resolution of disputed 318 sinkhole insurance claims. 319 (3)If there is coverage available under the policy and the 320 claim was submitted within the timeframe provided in s. 321 627.706(5), following the receipt of the report provided under 322 s. 627.7073 or the denial of a claim for a sinkhole loss, the 323 insurer shall notify the policyholder of his or her right to 324 participate in the neutral evaluation program under this 325 section. Neutral evaluation supersedes the alternative dispute 326 resolution process under s. 627.7015 but does not invalidate the 327 appraisal clause of the insurance policy. The insurer shall 328 provide to the policyholder the consumer information pamphlet 329 prepared by the department pursuant to subsection (1) 330 electronically or by United States mail. 331 Section 10.This act shall take effect July 1, 2025.