Federal Judge Enjoins Section of New Florida Insurance Reform Law Relating to Advertising and Solicitation by Roofing Contractors

August 2021

On July 1, 2021, Florida’s Senate Bill 76 (“SB 76”), which modified several provisions that impact Florida’s property insurance litigation, went into effect. This bill was Florida’s latest attempt to stabilize the rising insurance premiums and reduce the burden on Citizens Property Insurance Corporation by encouraging private carriers to write new policies on homes in Florida due to double-digit insurance rate increases, restricted coverage, or being forced to turn to the state’s insurer of last resort, Citizens. More specifically, Florida homeowner’s insurance lawsuits accounted for 76% of all litigation against insurers across the country in 2019. “When Florida accounts for only 8 percent of the nation’s property insurance claims but 76 percent of national property insurance litigation, you know there is a problem,” said Mark Wilson, president and CEO, Florida Chamber of Commerce. The new law also includes changes to the state’s one-way attorney fee statute, and imposes deadlines to file claims. It also placed new requirements and restrictions on roofing contractors, prompting several roofing companies to challenge constitutionality of the new law and new restrictions.

Part of the new law was an attempt to curtail the proliferation of solicited roof insurance claims. The frequency of roof claims and costs of those claims has increased dramatically in Florida over the past several years. Members of the insurance industry argue that solicited roof claims essentially have turned the homeowners’ insurance policy into a maintenance contract. The new law was designed to limit the ability of roofing contractors to use various forms of advertising to solicit jobs that entail insurance claims. However, roofing contractors challenged the new law and argued its restrictions violate their First Amendment rights. The state countered that the new law is a reasonable restriction on commercial speech in light of the state’s interest in combating consumer exploitation and fraud.

On July 11, 2021, a federal district judge sided with the roofing contractors and enjoined the portion of SB 76 dealing with advertisements by roofing contractors. In a 90-minute hearing, Chief U.S. District Court Judge, Mark Walker, of the United States District Court, Northern District of Florida, heard the companies’ argument for injunction that the law violates its free speech rights and is a “thinly veiled attempt to prevent anyone from assisting homeowners from making valid insurance claims to repair their homes.” The judge noted that the state identified substantial interests worthy of protection, but found those interests are not directly implicated by contractors advertising their roofing repair services to homeowners and informing homeowners that they may have storm damage that may be covered by insurance. As of this date, the injunction remains in effect and the case before Judge Walker is proceeding.