The state seeks to eliminate the challenge to the insurance law

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 imposes limits on rooftops.

An attorney for the Florida Department of Business and Professional Regulation countered that the law, passed in 2021 and revised during a special legislative session in May, violates roofers’ First Amendment rights. The revised version includes requiring roofers to make disclosures about ads — a requirement the lawsuit described as “unduly burdensome.”

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

“Furthermore, they do not allege anything about any particular door hangers, business cards, magnets or flyers that would suggest that mandatory disclosures would be unduly burdensome if included in those written materials,” wrote David Axelman, general counsel. for the department. whose secretary, Melanie Griffin, is a defendant in this case.

Roofing claims have been a key issue as lawmakers and other state leaders grapple with widespread problems in the property insurance system that have included insurers shedding customers and demanding large rate increases. Insurers blame dubious, if not fraudulent, roof damage claims for increasing costs and contributing to financial losses.

Lawmakers in 2021 passed a measure (SB 76) that imposed a number of restrictions on roofing, including seeking to prevent roofing contractors from asking homeowners to submit insurance claims through a “prohibited advertisement.” The law defined a prohibited advertisement as “any written or electronic communication from a contractor that encourages, directs, 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, pamphlets and emails.

After that advertising restriction was blocked on First Amendment grounds in a separate lawsuit, the Legislature in May revised it. As part of a broader insurance bill (SB 2-D), lawmakers required ads to include disclosures on issues such as informing consumers that they are required to pay any deductibles and that it is fraudulent to submit insurance claims that include false or misleading information. Ads that do not include the information would be considered prohibited.

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 content discrimination prohibited under the First Amendment because it imposes, on only a small group of commercial speakers—roofing contractors—compelled speech that, if otherwise valid, is equally applicable to a wide range of commercial actors, including doctors, auto repair shops, and other property repair and restoration companies, in connection with the payment of insurance deductibles and fraudulent insurance claims,” the lawsuit states.

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

“The ban is so comprehensive that, by its terms, a roofing contractor may not advise an insured that damage to their roof is probably covered by their policy and that they should call their insurer to check it or that the policy allows the homeowner to assign benefits to the roofing contractor, a mechanism that allows the roofing contractor to step into the shoes of the insured and make the claim directly to the insurer for the covered repair,” the lawsuit said.

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

“The existence of a right to assign benefits is clearly not an issue of insurance coverage, the latter involving a determination of whether a particular loss is covered by a policy,” the motion said. “Nor does the information plaintiffs purport to provide constitute an “interpretation” of a policy.”

The motion, which will be heard by U.S. District Judge Allen Winsor, also sought to outline the reasons lawmakers enacted the cap restrictions.

“The Legislature (in 2021) was particularly concerned with certain business practices that have become increasingly prevalent in the roofing industry and to which the Legislature attributed a sharp increase in roofing insurance litigation and inflated claims or roof cheats,” the motion. said. “The legislature’s solution took the form of (the law), which prohibits certain practices related to property insurance 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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