8.1 The 2022 and 2023 Property Reforms, the AOB Ban and Claim Notice Deadlines

Florida Property Insurance Legislative Reforms, VPL & FIGA

Quick Answer: Between 2022 and 2023, the Florida Legislature enacted landmark property insurance reforms through Senate Bills 2D and 2A and House Bill 837. These statutes eliminated Florida's historic one-way attorney fee statute for property insurance claims, banned post-loss Assignment of Benefits (AOB) agreements under F.S. § 627.7152, and established strict one-year notice deadlines for property damage claims under F.S. § 627.70132. When an admitted carrier becomes insolvent, the Florida Insurance Guaranty Association (FIGA) steps in to pay covered claims of less than $300,000, plus an additional $200,000 for the structure-and-contents portion of a homeowner's claim — a $500,000 combined ceiling.

Over the past decade, Florida's property insurance market suffered severe destabilization driven by runaway litigation, contractor assignment abuse, and catastrophic storm losses. To attract capital back to Florida and preserve carrier solvency, the Legislature restructured core insurance legal doctrines. Claims adjusters operating in Florida must be thoroughly versed in these statutory reforms, alongside the timeless mechanics of the Florida Valued Policy Law and FIGA insolvency administration.

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Landmark Property Insurance Reforms: SB 2A, SB 2D & HB 837

During extraordinary special sessions in 2022 and regular legislative sessions in 2023, Florida enacted the most comprehensive overhaul of property insurance litigation and claims handling in state history.

1. Complete Repeal of One-Way Attorney Fees

For decades, former Florida Statute § 627.428 permitted an insured or contractor who prevailed in litigation against an insurance company—even by obtaining a judgment for just $1 more than the insurer's initial claim offer—to recover 100% of their reasonable attorney fees from the carrier, while the insurer had no reciprocal right to recover fees if it won.

• The Reform: Enacted in Senate Bill 2A and broadened in House Bill 837, the Legislature completely repealed one-way attorney fee shifting for residential and commercial property insurance suits.
• Legal Impact: Property insurance disputes now follow the American Rule, under which each litigant pays their own legal fees regardless of outcome, unless fee-shifting is triggered under Florida's Proposal for Settlement / Offer of Judgment statute (F.S. § 768.79).

2. Total Prohibition of Post-Loss Assignment of Benefits (AOB)

An Assignment of Benefits (AOB) is an agreement by which a policyholder transfers post-loss insurance claim rights, benefits, and causes of action to a third party (such as a water remediation contractor or roofing company).

• The Abuse: Disreputable contractors frequently had homeowners sign AOBs during emergency service calls, billed inflated invoices directly to insurers, and filed immediate lawsuits against carriers leveraging the one-way attorney fee statute.
• The Statutory Ban: Under Florida Statute § 627.7152(13) (enacted via SB 2A), an insured cannot assign any post-loss insurance benefits under any residential property insurance policy or commercial property insurance policy issued on or after January 1, 2023.
• Void and Unenforceable: Any post-loss assignment agreement executed in violation of this statute is legally void, invalid, and unenforceable in Florida courts. Contractors must bill homeowners directly, and only the named insured or legal policyholder has standing to file an insurance claim or lawsuit against the carrier.

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Statutory Claim Notice Deadlines (F.S. § 627.70132)

To prevent late claim reporting that impedes prompt investigation and inflates claims costs, the Florida Legislature sharply curtailed the timeframe within which insureds must report property damage claims.

The Notice Timeframes

Under Florida Statute § 627.70132, an insured must provide notice of a claim to the insurer within the following strict statutory windows:

1. Initial Claim Notice: Notice of a new property claim must be given to the insurer within one year (12 months) from the date of loss.
2. Reopened Claim Notice: A request to reopen a previously closed claim must be reported within one year (12 months) from the date of loss.
3. Supplemental Claim Notice: A claim for additional loss or damage from the same peril that the insurer previously adjusted — or for costs incurred while completing repairs under an open claim for which timely notice was given — must be reported within 18 months from the date of loss. The statute keys the definition to the peril, not to a hurricane or windstorm specifically.

[Date of Loss Occurs]
         │
         ├──► Within 12 Months (1 Year): Must report Initial Claim or Reopened Claim
         │
         └──► Within 18 Months: Must report Supplemental Claim

Critical Adjuster Note on Peril Scope

These deadlines apply universally across all property insurance losses, including hurricanes, tornadoes, hail, pipe breaks, and fires. If a policyholder fails to provide notice within these statutory deadlines, the claim is legally barred as a matter of law.

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Bad Faith Now Requires an Adverse Adjudication First

Repealing one-way fees was only half the litigation reform. F.S. § 624.1551 added a gate in front of every property insurance bad-faith action: no extracontractual claim under § 624.155(1)(b) may be brought until the insured has established, through an adverse adjudication by a court of law, that the property insurer breached the insurance contract, and a final judgment or decree has been entered against the insurer.

Two things expressly do not count as an adverse adjudication:

• Acceptance of an offer of judgment under F.S. § 768.79.
• Payment of an appraisal award.

A gap between the insurer's appraiser's estimate and the final appraisal award may still be offered as evidence of bad faith, but the gap by itself creates no cause of action. The practical consequence for the adjuster is significant: paying an appraisal award, even one far above the carrier's own estimate, closes the file rather than opening a bad-faith exposure.

Contractor Conduct Rules the Adjuster Will See in the Field

F.S. § 489.147 attacks the demand side of the litigation problem. A contractor may not:

• Use a prohibited advertisement — any solicitation urging an owner to contact the contractor about a roof damage claim that fails to disclose, in at least 12-point type, that the owner is responsible for the deductible, that waiving a deductible is insurance fraud, and that filing a false claim is a felony.
• Offer a rebate, gift card, cash, coupon, or waiver of the insurance deductible in exchange for an inspection or a claim.
• Accept compensation for referring a customer for services.
• Interpret policy provisions or adjust a claim on the owner's behalf without a public adjuster license.
• Execute a roof repair contract without an itemized cost estimate and the required statutory notices, including the owner's right to cancel within 10 days after signing during a declared state of emergency.

Violations carry fines of up to $10,000 per violation for licensed contractors, plus discipline, and the same amount for unlicensed persons. An adjuster who documents a contractor soliciting with a deductible waiver has found evidence relevant to both the claim and a referral to the Division of Criminal Investigations.