Florida’s auto insurance marketplace could be in for a major shake-up, Connecticut legalizes recreational marijuana, and Texas updates its data breach notification law.
California
Lightning-Caused Wildfires Drive Up Claim Costs
Lightning-related homeowners insurance claim costs nationally rose dramatically due to a series of lightning strikes across northern California in 2020. The average cost per lightning claim in California was $217,555 in 2020, while the national average for this type of claim was nearly $29,000. The wildfires in California and elsewhere damaged homes which had to be either repaired or rebuilt with more expensive construction materials. The National Association of Home Builders reported that, between mid-April and mid-September 2020, lumber prices soared more than 170% nationwide, adding $16,148 to the price of a typical, new single-family home. The August Complex Fire, started by lightning strikes in August 2020, was the largest in California’s history, as defined by acres burned, according to the California Department of Forestry and Fire Protection. It spread across one million acres and impacted seven counties.—From Maria Sassian, Insurance Information Institute
Texas
Data Breach Notification Requirements Amended
Gov. Greg Abbott signed HB 3746, which amends the state’s data breach notification law. The new law stipulates that the attorney general must publicly post a listing of breach notifications it receives, excluding any sensitive personal information. The listing must be updated within 30 days of receiving a new breach notification and must remove notifications from the listing no later than one year after they are added if no additional notifications are reported. Companies reporting breaches to the attorney general must now also include the number of affected residents that disclosures have been sent to. The law takes effect Sept. 1. The existing law outlined requirements for companies reporting a breach to the attorney general, including timelines and information that must be included.—From Senior Managing Editor Phil Gusman
Iowa
Settlement Reached in Police Shooting of Motorist
The city of Cedar Rapids announced its insurer, States Insurance, will pay an $8 million settlement to a Black motorist, Jerime Mitchell, who was shot by a police officer during a traffic stop in 2016. In a statement, the city says it was prepared to go to trial in defense of all claims. “Pursuant to the city’s insurance policy, States Insurance has control over the settlement of this case and determined settlement to be in the best interests of its insured, the city,” adds the statement. According to news reports, the officer, Lucas Jones, was fired, but the police department maintains the termination was over a different traffic stop. Jones shot Mitchell after a struggle during a stop for a light that was out on Mitchell’s truck. News reports indicate the exact circumstances are in dispute and that Jones’ audio recording device was not working at the time, but Jones fired three times and struck Mitchell in the neck, paralyzing him. A grand jury declined to indict Jones after the incident.—From Senior Managing Editor Phil Gusman
Florida
Bill Would Replace No-Fault Auto Insurance System
The Florida legislature has taken steps that could spell the end of the state’s no-fault auto insurance rules. SB 54 would create a new framework to govern motor vehicle claims handling and third-party bad faith failure to settle actions against insurance carriers. The House and Senate approved SB 54, and the bill, if signed by Gov. Ron DeSantis, would take effect Jan. 1, 2022. Under the new law, PIP coverage and the no-fault provision would be discontinued. Florida drivers will instead be required to carry at least $25,000 in bodily injury coverage for the injury or death of one person, and $50,000 in coverage for the injury or death of two or more people. The insurance for the person at fault in the accident would be responsible for paying the claims. The reasoning is that discontinuation of no-fault insurance will stabilize and control Florida’s auto insurance rates. Some insurers, though, argue that if the minimum coverage requirement is raised, more drivers may drop coverage altogether.—From CLM Member Hitham Eldaher, Callahan & Fusco
New Jersey
Volunteer Injured at Work-Related Event Compensable
In Kim Goulding v. NJ Friendship House, Inc., Kim Goulding, an employee of North Jersey Friendship House, Inc., injured her ankle while volunteering at a “Family Fun Day.” Goulding filed a workers’ compensation claim, which Friendship House denied because Goulding was not working at the time. Generally, under the Workers’ Compensation Act, an employee injured during a social or recreational activity cannot receive workers’ compensation benefits. But there is an exception under N.J.S.A. 34:15-7 such that, “when such recreational or social activities [1] are regular incident of employment and [2] produce a benefit to the employer beyond improvement in employee health and morale,” the injury is compensable. The Supreme Court of New Jersey found that, while Goulding had volunteered, her activities at the event were not recreational or social, and to disqualify her compensability “ignores that the act is supposed to be construed liberally in favor of compensation, and it fails to consider the employee’s role in the activity.”—From CLM Member Chelsea Novelli, Callahan & Fusco
Connecticut
Recreational Cannabis Legalized
Connecticut has become the latest state to legalize recreational use of marijuana after Gov. Ned Lamont signed SB 1201. Effective July 1, adults 21 and over can have up to 1.5 ounces of cannabis on their person and up to five ounces in their homes or locked in their car, truck, or glove compartment. The law also automatically erases certain cannabis-related convictions that occurred between Jan. 1, 2000, and Oct. 1, 2015, and allows for petitioning to erase convictions outside that period. Employers may continue to enforce drug-free workplaces under the law. The law aims to create a retail marketplace in the state by the end of 2022, and it implements “equitable marketplace requirements under which at least half of all initial licenses are reserved for social equity applicants, targeting those communities that have been most negatively impacted by the so-called war on drugs.” It also creates the Social Equity Council, which will support social equity applicants.—From Senior Managing Editor Phil Gusman