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Florida Senate
-
2026
SB 1240
By
Senator Davis
5-01562-26 20261240__
1 A bill to be entitled
2 An act relating to insurance regulation; amending s.
3 627.4025, F.S.; making clarifying changes regarding
4 the definition of residential coverage; amending s.
5 627.418, F.S.; prohibiting insurers from imposing or
6 enforcing certain policy conditions or requirements;
7 providing an exception; specifying that such
8 conditions or requirements are void; requiring
9 insurers to make certain disclosures and allow the
10 insured to cancel the policy under certain
11 circumstances; amending s. 627.426, F.S.; revising the
12 conditions under which liability insurers may deny
13 coverage based on a particular coverage defense;
14 amending s. 627.70131, F.S.; revising the timeframe in
15 which insurers must pay or deny claims; revising
16 requirements for the explanation for the payment,
17 denial, or partial payment; specifying that insurers
18 have an obligation to pay a specified amount under
19 certain circumstances; authorizing the Department of
20 Financial Services to enforce such obligation; making
21 a clarifying change regarding interest payments;
22 providing an effective date.
23
24 Be It Enacted by the Legislature of the State of Florida:
25
26 Section 1. Subsection (1) of section 627.4025, Florida
27 Statutes, is amended to read:
28 627.4025 Residential coverage and hurricane coverage
29 defined.—
30 (1) Residential coverage includes both personal lines
and
31
commercial lines coverage. Personal lines residential coverage
32
includes
residential coverage, which consists of the type of
33
coverage provided by
homeowner, mobile home owner, dwelling,
34 tenant, condominium unit owner, cooperative unit owner, and
35 similar
personal lines residential
policies
.
, and
Commercial
36 lines residential coverage
includes
, which consists of the type
37
of coverage provided by
condominium association, cooperative
38 association, apartment building, and similar
commercial lines
39
residential
policies, including policies covering the common
40 elements of a homeowners association. Residential coverage for
41 personal lines and commercial lines as set forth in this section
42 includes policies that provide coverage for particular perils
43 such as windstorm and hurricane or coverage for insurer
44 insolvency or deductibles.
45 Section 2. Subsection (3) is added to section 627.418,
46 Florida Statutes, to read:
47 627.418 Validity of noncomplying contracts.—
48
(3) An insurer may not impose or enforce any policy
49
condition or requirement that is not authorized by this
50
insurance code unless the condition or requirement has been
51
submitted to and approved by the office. Any such
unauthorized
52
condition or requirement is void and unenforceable. If a policy
53
contains any condition or requirement not authorized by this
54
insurance code
but approved by the office
,
the insurer must
55
clearly disclose such provision to the insured at the time of
56
issuance
along with necessary definitions to understand the
57
provisions of the policy and the steps required for compliance
58
with the provisions of the policy
, using plain language, and
59
must allow the insured to cancel the policy within 10 days
after
60
receipt at no cost.
The disclosure must include the following
61
notice, printed in bold type:
62
63
IMPORTANT NOTICE: SOME PROVISIONS IN THIS POLICY ARE
64
NOT ESTABLISHED BY FLORIDA STATUTES. FAILURE TO MEET
65
THESE CONTRACTUAL REQUIREMENTS MAY AFFECT YOUR
66
COVERAGE OR RESULT IN CLAIM DELAY OR DENIAL. YOU HAVE
67
RIGHTS UNDER FLORIDA LAW. YOU MAY CANCEL THIS POLICY
68
WITHIN 10 DAYS
AFTER
RECEIPT AT NO COST.
69 Section 3. Subsection (2) of section 627.426, Florida
70 Statutes, is amended to read:
71 627.426 Claims administration.—
72 (2) A liability insurer
may
shall
not be permitted to deny
73 coverage based on a particular coverage defense unless
all of
74
the following conditions are met
:
75 (a)
1.
Within 30 days after the liability insurer knew or
76 should have known of the coverage defense, written notice of
77 reservation of rights to assert a coverage defense is given to
78 the named insured by United States postal proof of mailing,
79 registered or certified mail, or other mailing using the
80 Intelligent Mail barcode or other similar tracking method used
81 or approved by the United States Postal Service sent to the last
82 known address of the insured or by hand delivery
.
Such notice of
83
reservation of rights must include all the following:
84
a.
A clear statement of the factual issue giving rise to
85
the reservation of rights.
86
b.
An explanation, in plain language, of why the issue may
87
affect coverage.
88
c.
A description of any additional information or
89
documentation needed from the insured.
90
d.
A description of the next steps in the investigative
91
process and the expected timeframes for completing those steps.
92
e.
If the insurer determines that fraud or
93
misrepresentation may affect the claim, identif
ication of
the
94
specific facts supporting that determination.
95
2.
A
notice of
reservation of rights
given
under this
96
section may not be used to extend, delay, or suspend the payment
97
of a covered loss or any statutory deadline for paying or
98
denying a claim under th
is
code.
;
and
99 (b) Within 60 days
after
of
compliance with paragraph (a)
100 or receipt of a summons and complaint naming the insured as a
101 defendant, whichever is later, but in no case later than 30 days
102 before trial, the insurer:
103 1. Gives written notice to the named insured by United
104 States postal proof of mailing, registered or certified mail, or
105 other mailing using the Intelligent Mail barcode or other
106 similar tracking method used or approved by the United States
107 Postal Service of its refusal to defend the insured;
108 2. Obtains from the insured a nonwaiver agreement following
109 full disclosure of the specific facts and policy provisions upon
110 which the coverage defense is asserted and the duties,
111 obligations, and liabilities of the insurer during and following
112 the pendency of the subject litigation; or
113 3. Retains independent counsel which is mutually agreeable
114 to the parties. Reasonable fees for the counsel may be agreed
115 upon between the parties or, if no agreement is reached, shall
116 be set by the court.
117 Section 4. Paragraph (a) of subsection (7) of section
118 627.70131, Florida Statutes, is amended to read:
119 627.70131 Insurer’s duty to acknowledge communications
120 regarding claims; investigation.—
121 (7)(a) Within
30
60
days after an insurer receives notice
122 of an initial, reopened, or supplemental property insurance
123 claim from a policyholder, the insurer shall pay or deny such
124 claim or a portion of the claim unless the failure to pay
or
125
deny
is caused by factors beyond the
insurer’s
control
of the
126
insurer
. The insurer shall provide a
clear, written
reasonable
127 explanation
in writing
to the policyholder
which outlines the
128
reasoning
of the basis in the insurance policy, in relation to
129
the facts or applicable law,
for the payment, denial, or partial
130 denial of
the
a
claim
, referencing relevant sections of the
131
insurance policy, applicable facts, or laws
.
Such explanation
132
may not be solely a recitation of policy provisions without
133
application of those provisions to the facts of the claim.
If
134 the insurer’s claim payment is less than specified in any
135 insurer’s detailed estimate of the amount of the loss, the
136 insurer must provide a reasonable explanation in writing of the
137 difference to the policyholder. Any payment
for
of
an initial or
138 supplemental claim or portion of such claim made 60 days after
139 the insurer receives notice of the claim, or made after the
140 expiration of any additional timeframe provided to pay or deny a
141 claim or a portion of a claim made pursuant to an order of the
142 office finding factors beyond the
insurer’s
control
of the
143
insurer
, whichever is later, bears interest at the rate set
144 forth in s. 55.03. Interest begins to accrue from the date the
145 insurer receives notice of the claim.
If the insurer fails to
146
pay the
full amount owed
on the claim
within 90 days after
the
147
insurer receives
notice of the claim
or within any extended
148
timeframe authorized by order of the office
, the insurer has an
149
uncontestable obligation to
pay
the amount owed
,
together with
150
interest as provided in this subsection and an additional equal
151
interest penalty.
The department may enforce such obligation.
152 The provisions of this subsection may not be waived, voided, or
153 nullified by the terms of the insurance policy. If there is a
154 right to prejudgment interest, the insured must select whether
155 to receive prejudgment interest or interest under this
156 subsection. Interest is payable when the claim or portion of the
157 claim is paid
, even if the payment is contingent upon a release
.
158 Failure to comply with this subsection constitutes a violation
159 of this code. However, failure to comply with this subsection
160 does not form the sole basis for a private cause of action.
161 Section 5. This act shall take effect July 1, 2026.