A federal judge is halting the enforcement of a portion of Florida’s new property insurance reform law (SB 76) following a challenge filed by a roofing contractor.
According to the Insurance Journal, Chief U.S. District Judge Mark Walker granted an injunction on Sunday following a lawsuit filed by Gale Force Roofing and Restoration LLC that claimed the new law violates speech rights.
“We are thrilled Judge Walker carefully reviewed this case and this statute and believe he made the right decision that will ultimately serve to protect consumers in the state of Florida and ensure the Constitution remains the guidepost for future regulations,” said Zach Willard, a principal of Gale Force.
SB 76 was signed into law on June 11 and went into effect on July 1. The new law targets how roof damage claims can be handled, with supporters claiming questionable and potentially fraudulent roof-damage claims are contributing to increased property insurance costs. The law poses restrictions on roofing contractors, including banning written or electronic communication that encourages, induces, or instructs someone to contact a contractor or public adjuster for the purpose of filing an insurance claim for roof damage.
According to the Tampa Bay Business Journal, Gale Force Roofing and Restoration LLC filed a lawsuit in June claiming this portion of the law that prohibits companies from soliciting homeowners violates commercial free speech and First Amendment rights.
“The act is an unconscionable attack on the right for homeowners to receive truthful information about how to repair and pay for the repairs to remedy damage they may have to their property,” the company’s attorneys wrote. “In reality, it is a thinly veiled attempt to prevent anyone from assisting homeowners from making valid insurance claims to repair their homes.”
Walker agreed this section of the law violates the First Amendment. According to the Insurance Journal, Walker said this portion doesn’t indicate that the ban only applies to speech that is “misleading, fraudulent, or concerning illegal activity.”
Prior to the halt, the law prohibited roofing contractors from using everything from door hangers to business cards, magnets and emails to solicit business. Legislators who supported the law said these prohibitions were intended to stop roofing contractors from pressuring homeowners into making repairs and charging insurance providers.
The state’s Department of Business and Professional Regulations Secretary Julie Brown disputed the First Amendment violation claim. In a court filing, Brown argued the law only prohibited advertisements if they encouraged homeowners to make a “roofing-insurance claim.”
In his 44-page decision, Walker said there is a difference between targeting disfavored conducts of practices and targeting anything that may lead to that conduct, adding the state failed to show why this ban on speech is a “reasonable fit for achieving its interest in reducing insurance costs.”
The law continues to remain a hot topic for roofing contractors, as the passing of this law could spur other states to enact similar laws and restrictions.
“The very fact that these issues and limitations were being debated in Florida should be worrisome for the entire country,” wrote Trent Cotney, CEO of Cotney Attorneys & Consultants. “If Florida insurers had been given permission to offer less coverage for older roofs, other states’ insurers could have followed their lead. And other lawmakers could have imposed similar restraints on roofing contractors’ actions.”
