Federal Judge Halts Part of Florida’s New Property Insurance Reform Law

A federal judge has halted enforcement of a section of Florida’s new property insurance reform (SB 76) law that restricts the advertisements and solicitations of roofing contractors.

U.S. District Judge Mark Walker granted the injunction Sunday in response to a complaint by a roofing contractor that the section of the law violates commercial speech rights and the First Amendment.

The legislation, which passed on the last day of the legislative session and was signed into law on June 11 by Gov. Ron DeSantis, went into effect July 1.

Judge Walker found that the section of the law that bans “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” violates the First Amendment of contractors.

He enjoined enforcement of this section of the new law but did not declare the entire law unconstitutional.

The complaint was brought by Gale Force Roofing and Restoration and heard on Friday in an expedited session.

The advertisements prohibited by the section include, but are not limited to, door hangers, business cards, magnets, flyers, pamphlets, and e-mails. The language does “not indicate that its prohibition applies only to speech that is misleading, fraudulent, or concerning illegal activity,” the judge noted.

Sponsors of the legislation were looking to thwart roofing contracting firms that pressure homeowners to make unnecessary repairs and then charge insurance providers, driving up insurance costs.

The state Department of Business and Professional Regulation unsuccessfully argued that the provision is a reasonable restriction on commercial speech to combat consumer exploitation and fraud, “ensuring that the line between contractor and insurance adjuster is not blurred,” and protecting Florida homeowners from “skyrocketing insurance premiums, or, worse, the inability to secure homeowner’s insurance at all.”

The judge agreed fraud is a serious issue for the state but said the Legislature failed to address these concerns within the bounds set by the Constitution. He found the provision goes too far in limiting advertising and solicitations by contractors and suggested that the state has other options to address fraudulent behavior without imposing such a wide ban on contractors’ speech.

He found that while the state of Florida has identified substantial state interests, none of these interests are directly implicated by contractors advertising their roofing repair services to homeowners and informing homeowners that they may have storm damage that may be covered by insurance.

He said the evidence suggests that there are “less restrictive, narrowly drawn means “available to the state rather than prohibiting protected speech that does not directly cause the identified ills.

“There is a difference between targeting disfavored conduct or practices (contractors acting as public adjusters, exploiting consumers, filing fraudulent claims, etc.) and targeting anything that may lead to that conduct— including truthful information that a consumer may have storm damage, and that storm damage may be covered by insurance,” the judge wrote in his 44 page decision.

He said the state failed to show why this prohibition on speech is a “reasonable fit for achieving its interest in reducing insurance costs for Floridians, as opposed to other lesser restrictive means” like an economic policy of subsidy or costs regulations.

He also criticized the state’s evidence as “lackluster” in claiming that the total cost of insurance fraud is $40 billion but later acknowledging that the $40 billion figure includes categories of fraud in addition to more roofing fraud.

In addition to targeting roofing contractors, the new law also includes changes to the state’s one-way attorney fee statute, the eligibility and glidepath of Citizens, and the deadline to file claims.