To stabilize the market, Florida Insurers need to be empowered to refuse the “Dane-geld”
"Though we know we should defeat you, we have not the time to meet you.
We will therefore pay you cash to go away."
And that is called paying the Dane-geld;
But we've proved it again and again,
That if once you have paid him the Dane-geld
You never get rid of the Dane.”
Excerpt from Rudyard Kipling’s poem “Dane-Geld”
Florida’s laws and especially F.S. 627.428 (the “one-way attorney fee statute”) have encouraged/forced insurance companies who do business in the state to pay the “Dane-geld” for years. King Aethelred of England paid 10,000 pounds of silver in 991 AD, then 36,000 in 1007 AD, then 48,000 in 1012 AD. Paying the "Dane-geld" encourages more demands until eventually the situation is untenable. Recent insolvencies and withdrawals of multiple insurers is a testament that the insurance situation in Florida is untenable or soon will be. Florida is overrun with “Danes” in the form of lawyers, contractors, public adjusters, and other service providers who come to banquet on significant “attorney’s fee and costs” extracted from insurers in addition to policy benefits. If you have read this far and are upset (perhaps because the shoe fits too well), I will apply a modest salve and concede there certainly are “Danes” who provide legal and other services to insurers – but argue that presents a “chicken or the egg” causality dilemma.
The Florida Legislature is meeting for a special session this week, and the “one-way attorney fee statute” appears to be something that is coming up for debate. Half-measures have not worked thus far and will not work. Envision a balloon held in front of you and your goal is to make it smaller. If you squeeze one side, the balloon will bulge out in the other directions. For example, restrict assignments of benefits, and there will be a rise in other artifices concocted in law firm laboratories by very talented lawyers (directions to pay, “reassignment of benefits”, letters of protection, etc.) to achieve the same goal: litigation (or the threat thereof) to facilitate high transfer of premium dollars to lawyers and the non-lawyers acting in concert with them. To make a balloon smaller, you have to let the air out. In Florida, this means drastically reducing the supply of “Dane-geld” and as a result the population of “Danes.” To do that, eliminate the “one-way attorney fee statute” and empower insurers to more often refuse to pay the “Dane-geld” – nothing less will make significant change to the status quo.