The state seeks to overcome the challenge of insurance legislation

Saying the property insurance market “remains in crisis,” the state on Monday asked a federal judge to throw out a challenge to a law that places limits on roofers.

An attorney for the Florida Department of Business and Professional Regulation argued that the law, passed in 2021 and revised during a special legislative session in May, violates the First Amendment rights of those covered. The revised version includes a requirement that roofers disclose the ad — a requirement the lawsuit describes as “unduly burdensome.”

The department’s 29-page motion to dismiss the case argues that the plaintiffs, Florida Reconstruction Association and Apex Roofing & Reconstruction, LLC, have not shown standing to pursue such claims.

“Furthermore, they assert nothing about any particular door hangers, business cards, magnets or flyers that would suggest that the required disclosures would be unduly burdensome if included in these written materials,” wrote David Axelman, general counsel for the department whose secretary, Melanie Griffin, is the defendant in the case.

Roofing claims were a key issue as lawmakers and other state leaders grappled with widespread problems in the property insurance system that include insurers turning customers away and seeking large rate increases. Insurers blame dubious, if not fraudulent, roof damage claims for driving up costs and contributing to financial losses.

In 2021, lawmakers passed a measure (SB 76) that imposed a number of restrictions on roofers, including seeking to prevent roofing contractors from soliciting homeowners to file insurance claims through “prohibited advertising.” The law defines prohibited advertising as “any written or electronic communication from a contractor that encourages, instructs, or induces a consumer to contact a contractor or public adjuster for the purpose of making an insurance claim for roof damage. The term includes but is not limited to door hangers, business cards, magnets, flyers, brochures and emails.’

After that advertising restriction was blocked on First Amendment grounds in a separate case, the Legislature in May revisited it. As part of a broader insurance bill (SB 2-D), lawmakers require ads to include disclosures about things like informing consumers they’re required to pay any deductibles and that it’s fraudulent to file insurance claims that include false or misleading information. Ads that do not include the information will be considered disallowed.

The Florida Restoration Association and Apex Roofing & Reconstruction filed their lawsuit in 2021 and an amended version on June 27. They said the restrictions violate First Amendment rights related to issues such as advertising and the ability to advise homeowners about insurance coverage.

“The disclaimers also constitute prohibited content discrimination under the First Amendment because they impose, solely on a small set of commercial speakers—roofing contractors—compelled speech that, if otherwise valid, is equally applicable to a broad range of commercial participants.” , including doctors, auto repair shops and other property repair and restoration companies regarding insurance deductible payments and fraudulent insurance claims,” the lawsuit says.

Additionally, the plaintiffs targeted a section of the law that prevents roofing contractors from “interpreting policy provisions or advising an insured (customer) regarding coverages or obligations under the insured’s property insurance policy or adjusting a property insurance claim from the name of the insured, unless the contractor holds a license as a public adjuster.’

“The prohibition is so comprehensive that under its terms a roofing contractor may fail to notify the insured that damage to their roof is likely to be covered by their policy and that they should call their insurer to verify this or that the policy allows the owner on the home to assign benefits to the roofing contractor, a mechanism that allows the roofing contractor to step into the shoes of the insured and make a claim directly with the insurer for the covered repair,” the lawsuit states.

But in Monday’s motion to dismiss the case, the state disputed the plaintiffs’ arguments, saying they were based on a “misinterpretation” of the law. In particular, the state took aim at the indemnity-assignment argument, a long-standing practice in which homeowners sign over indemnities to contractors who then seek payment from insurance companies.

“The existence of a right to transfer benefits is clearly not a question of insurance coverage, the latter of which involves determining whether a particular loss is covered by a policy,” the motion said. “Nor does the information plaintiffs provide constitute an ‘interpretation’ of policy.”

The motion, which will be heard by U.S. District Judge Alan Winsor, also seeks to highlight the reasons lawmakers enacted the roof limits.

“The Legislature (in 2021) was particularly concerned about certain business practices that were becoming more prevalent in the roofing industry and to which the Legislature attributed a sharp increase in roofing-related insurance claims and inflated or otherwise fraudulent roofing claims.” “, the suggestion I said. “The Legislature’s decision is in the form of (the law) prohibiting certain property insurance practices by contractors.” A year later, Florida’s property insurance market remains in crisis — so much so that the governor called a special legislative session to address it.

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