How to Use Data to Combat Florida’s Insurance Litigation Nightmare

Florida has a big insurance litigation problem. Data from the National Association of Insurance Commissioners (NAIC) showed that even though Florida represented just 8% of all homeowner insurance claims in the United States in 2019, the state delivered about 76% of all litigation against homeowner carriers that year.

The problem has been getting worse, according to data mined by Roig Lawyers. There were 68,000 lawsuits filed against insurance carriers in Florida in June 2021 – an all-time high – marking an 11,000 increase from 57,000 in the month before, and more than doubling from about 30,000 in June 2020.

There was no major hurricane event or catalyst for this deluge of litigation, most of which was filed around Miami, Broward County, Palm Beach, Tampa, and Orlando. And it’s not just property claims either. We’ve seen a huge increase in personal injury protection (no-fault) litigation, property, windshield, and worker’s compensation, while health insurance carriers have also been getting sued like we’ve never seen before.

The Insurance Litigation Problem

Why is Florida such a hotbed ­– or hot mess – of insurance litigation? While recent legislative changes are trying to chip away at property litigation, they still lack teeth and do nothing to address claims besides property.

A major problem is Florida’s fee-shifting rules, which create a huge incentive for attorneys to sue insurers. At Roig, we’ve seen carriers sued for tiny amounts, but when plaintiffs win, insurers must pay their attorney’s fees, which can amount to tens of thousands of dollars. In contrast, New York requires attorney’s fees to be proportional to awarded damages.

Technologically speaking, Florida’s court systems are a little behind the times. When carriers get sued, they get a jumbled mess of information, and they have to employ people to extract data manually. It puts carriers on the defensive – how will a company address this problem at the root when it’s spending resources just putting information into a computer? When you’re talking about big insurance carriers, who are seeing thousands of lawsuits in a single month, that’s a lot of wasted time.

We had to deal with this problem at Roig. We tried to transfer information from lawsuits into our system to help our clients strategize. As the mountains of documents grew, we knew we had to find a better solution, so we developed proprietary software that mines, extracts, and organizes all the state’s litigation data to help carriers get on the offensive.

How Data Helps Inform Strategy

This litigation problem in Florida requires serious reform at the legislative level, which means insurance carriers should be trying to communicate with lawmakers. After all, expensive litigation against insurers won’t end well for consumers as insurers pull out of the market and rates increase.

Meanwhile, insurers can use data to get in front of this problem. For instance, they can look at the data and see which plaintiffs’ attorneys are filing massive amounts of lawsuits, and then communicate with them to try to get some of these issues resolved before they become lawsuits.

Another tactic is using the data to see how the plaintiffs’ attorneys are strategizing and adjust policy documents to thwart them. Take a recent example. A plaintiff attorney filed a case in Broward County. The insured lived in Brevard County, which is also where the auto accident occurred and where all the witnesses resided. But the attorney cherry-picked the venue thinking it would be more favorable for the case. With a look at that kind of data, an insurance carrier can easily head off that problem by including a venue selection clause in its policy.

Add Data to the Litigation Defense Arsenal

Data has brought Florida’s insurance litigation problems to light, and it’s also a vital tool that insurance carriers can use to manage the problem until the government puts meaningful structural reform into place.

If you want to learn more about Roig’s insurance litigation data technology solutions, contact us.