No. HB 1269
Filed under Insurance.
Awards of Attorney Fees in Insurance Claims; Revises procedures for awards of attorney fees in legal proceedings for declaratory reliefs to determine insurance coverage; provides guidelines for awards of attorney fees in civil claims for damages against surplus lines insurers & insurers.
Plain English Summary
AI-GENERATEDRewrites the fee statute for insurance-coverage declaratory judgments. Policyholders can now recover attorney fees after a mere reservation of rights, not just a full denial, and property-insurance disputes -- previously excluded -- now qualify too.
Two new statutes tie attorney fees in insurer damage suits to whoever 'wins' against a written settlement offer. A policyholder who turns down a fair offer and later recovers less than it at trial can end up owing the insurer's fees.
Fees are now also owed when an insurer voluntarily dismisses a coverage lawsuit instead of losing it outright, closing an exit insurers previously had. The right to fees extends to third-party beneficiaries, not just the original policyholder.
Uninsured motorist coverage disputes are steered to the older, one-way fee rule instead of the new offer-based system. Guaranty funds that cover insolvent insurers are shielded from fee awards unless they affirmatively deny a claim, and this all applies only to policies issued from July 2026 on.
AIThe old rule required a full ('total') denial of coverage before the fee right existed, and expressly said a reservation-of-rights defense did not count as a denial. Both limits are gone: reserving the right to deny coverage later now triggers the same fee exposure as an outright denial.
AIThe prior version of this statute expressly excluded residential and commercial property insurance from its fee-shifting rule for declaratory-relief coverage suits. That exclusion is deleted outright, so property-insurance coverage disputes can now use this statute too.
AITwo new statutes -- one for surplus lines insurers, one for insurers generally -- award attorney fees to whichever side is the 'prevailing party' in a damages suit, measured against each side's written settlement offers rather than simply who wins the case.
AIPreviously only a declaratory judgment in the policyholder's favor triggered the fee right. Now an insurer that voluntarily dismisses its own coverage lawsuit, with or without prejudice, triggers the same fee award instead of avoiding it.
AIThe fee right previously ran to the 'named' insured, omnibus insured, or named beneficiary. It now also runs to a 'third-party beneficiary,' a broader category that can include people never specifically named in the policy.
AIUninsured and underinsured motorist coverage disputes are carved out of the new two-way, offer-based fee statutes entirely. Instead, fees in a UM/UIM coverage dispute are recovered under the older, one-way section 86.121 rule.
AIClaims presented to the insurer-insolvency guaranty association are exempt from the new attorney-fee statute, unless the association affirmatively denies the claim or part of it. Delay alone, however long, does not count as a denial that opens up fee exposure.
AIPIP (no-fault) attorney-fee disputes already applied the general offer-of-judgment statute, s. 768.79. This adds the new insurer fee statute, s. 627.4275, alongside it, layering a second fee-shifting mechanism onto PIP litigation.