Florida Statute 627.428: One-Way Attorney Fees After Repeal

Florida Statute 627.428 was the state’s one-way attorney fee-shifting law for insurance disputes: if you sued your insurer over a denied or underpaid claim and won, the insurer had to pay your attorney’s fees. That protection has been largely dismantled. For most insurance contracts issued or renewed on or after March 24, 2023, the automatic right to recover fees under 627.428 no longer exists, replaced by a narrower, conditional fee structure that varies by policy type.

What the Original Statute Did

Under the original text of Section 627.428, a court that entered judgment against an insurer and in favor of a policyholder was required to award the policyholder a reasonable sum for attorney’s fees incurred in prosecuting the suit.¹ The insurer paid the policyholder’s legal bill on top of whatever the policy owed.

The fee-shifting ran only one direction. If the insurer won, it could not turn around and collect its fees from the policyholder. That asymmetry was the point. It offset the imbalance between individual policyholders and insurers with in-house legal departments, and it made it economically possible to challenge a wrongful denial when the disputed benefits were smaller than the cost of litigating.

The statute applied broadly across property, auto, life, and other lines. One carve-out existed for life insurance and annuity claims: no fees could be awarded if suit was filed less than 60 days after proof of claim was submitted to the insurer.¹

Who Could Recover Fees

The statute entitled any “named or omnibus insured” or “named beneficiary” under the policy to recover fees after obtaining a favorable judgment.¹ Case law extended the same right to third parties holding an Assignment of Benefits from the policyholder, typically contractors or restoration companies performing repair work. They stepped into the policyholder’s shoes and could collect fees under 627.428 if they prevailed.

The Florida Supreme Court also expanded the trigger for fee-shifting. In Wollard v. Lloyd’s & Companies of Lloyd’s (1983), the court held that when an insurer pays a previously disputed claim after suit is filed, that payment is “the functional equivalent of a confession of judgment or a verdict in favor of the insured.”² The insurer could not sidestep fee liability by writing a check the day after the complaint was served.

Does 627.428 Still Apply to Your Policy?

The answer depends on when your policy was issued or last renewed, and what kind of insurance it is.

The first cutback came in a December 2022 special session. Senate Bill 2A, effective December 16, 2022, eliminated one-way fee recovery under 627.428 for residential and commercial property insurance claims and reinstated the offer-of-judgment statute (Section 768.79) in property disputes.³ It also barred post-loss assignments of benefits under new residential and commercial property policies, closing off the AOB pipeline that had driven much of Florida’s property litigation.⁴

House Bill 837, signed on March 24, 2023, went further. It repealed the one-way fee-shifting provisions of Sections 627.428 and 626.9373 for insurance contracts issued or renewed on or after that date, across essentially all lines of coverage.⁵

So the practical rule is this. If your policy was issued or last renewed before March 24, 2023, the older version of 627.428 may still govern your dispute. If it was issued or renewed on or after that date, you are working under the new regime described below.

Property Insurance: The Graduated Formula

For property insurance claims under the new rules, attorney fee recovery runs through Section 627.70152 rather than 627.428. The calculation turns on the “disputed amount,” which is the gap between your presuit settlement demand and the insurer’s presuit settlement offer.⁶

The tiers work like this:

If the difference between what you recover and what the insurer offered before suit is less than 20% of the disputed amount, each side pays its own attorney fees.
If it is 20% to less than 50%, the insurer pays a proportional share of your fees, calculated as the percentage of the disputed amount you recovered multiplied by your total fees and costs.
If it is 50% or more, the insurer pays your full attorney fees and costs.

The old guarantee is gone. Winning is not enough. You have to beat the insurer’s presuit offer by a meaningful margin, and an insurer that puts a reasonable number on the table before suit can effectively insulate itself from fee liability even if you ultimately recover more at trial.

Property claims also carry a presuit notice requirement. Before filing, you must serve a written notice of intent to litigate on the Florida Department of Financial Services using the department’s form, at least 10 business days before suit, and only after the insurer has made a coverage determination.⁶ The notice has to spell out the insurer’s acts or omissions and, where the dispute is not a total denial, include an itemized presuit demand with fees calculated by actual hours worked times a reasonable rate. Skip or bungle this step and the court must dismiss without prejudice.

Non-Property Insurance: A Narrow Replacement

For non-property lines, HB 837 created Section 86.121, a much narrower successor to 627.428. A named insured, omnibus insured, or named beneficiary can recover attorney fees after winning a declaratory judgment action, but only where the insurer completely denied coverage. An insurer that defends under a reservation of rights has not completely denied coverage, so the fee provision does not apply. The right under 86.121 cannot be assigned or transferred to third parties, and it does not reach property insurance at all.

For most non-property disputes that are not outright coverage denials — arguments over payment amounts, valuation, scope of loss, or partial denials — there is no equivalent fee-shifting statute anymore.

The Two-Way Risk of Offer of Judgment

Florida Statute 768.79 applies across civil litigation, including insurance disputes, and it runs both directions. Either side can serve a formal settlement offer. If the other side rejects it and the final judgment is at least 25% worse than the offer, the rejecting party pays the offeror’s attorney fees and costs from the date the offer was served.⁷

If an insurer serves you an offer of judgment and you reject it but then recover a judgment at least 25% less than the offer, the insurer can collect its attorney fees from you. Those fees get set off against what you won, and if they exceed your judgment, the court enters a judgment against you for the difference.⁷ You can end up owing money after winning your case. SB 2A specifically brought this statute back into property insurance disputes.³

The mirror image works in your favor. Serve a demand for judgment that the insurer rejects, then recover at least 25% more than your demand, and the insurer pays your fees from the date you served the demand. That tool only helps if the demand is calibrated to the case. Overshoot and you lose the trigger.

What This Means Before You Sue

Under the pre-reform version of 627.428, litigating a wrongful denial was a relatively low-risk proposition. Winning meant the insurer paid your lawyer. That is no longer the default. If your policy was issued or renewed on or after March 24, 2023, a property insurance case runs through the graduated formula in 627.70152, where only a decisive win over the insurer’s presuit offer produces full fee recovery, and a small win over that offer produces none. Non-property cases have essentially no fee-shifting unless the insurer flatly denied coverage and you win a declaratory judgment.

Layered on top of that, the offer-of-judgment statute means rejecting a reasonable settlement offer can leave you owing the insurer’s legal costs. The value of a careful, sober evaluation of the claim before filing — what it is worth, what the insurer has offered, and how the numbers line up against the 20%, 25%, and 50% thresholds — is higher than it was under the old law. Check your policy’s issue or renewal date first. That single date determines which set of rules governs your dispute.

1
Florida Senate. Florida Statutes 627.428 – Attorney Fees
2
Justia Law. Wollard v. Lloyd’s and Companies of Lloyd’s
3
Florida Senate. Property Insurance – 2022A Bill Summaries
4
Florida Senate. Senate Bill 2A – Property Insurance
5
Florida Senate. House Bill 837 – Civil Remedies
6
Florida Senate. Florida Statutes 627.70152 – Suits Arising Under a Property Insurance Policy
7
Florida Senate. Florida Statutes 768.79 – Offer of Judgment and Demand for Judgment