Florida Must Tackle Insurance ‘Assignment of Benefits’ Problems

One of the major concerns Atwater and other Florida officials have is the increase in homeowners insurance rates as well as the possibility that insurers will pull out of certain areas.

Florida’s Chief Financial Officer, Jeff Atwater recently addressed lawmakers and stated that the assignment of benefits insurance practice must be addressed as it continues to drive up homeowner insurance rates in Florida.

While lawmakers looked at the problem this spring they could not agree on changes so nothing was done about a practice that insurance companies say is riddled with abuse and fraud. Insurers claim that the assignment of benefits practice is increasing homeowners insurance costs across the state.

What is Assignment of Benefits?

Homeowners who need property repairs damage are asked by their contractor to sign an assignment of benefits (AOB) form, which signs over their insurance benefits to the contractor who then requests payment from the insurer. Insurance companies say that this process has led to abuse by a number of contractors who partner with shady law firms to sue the insurer. This can dramatically push up the cost of a claim.

In many cases, especially roofing and flood damage claims, the work is either not done or done shoddily and the contractor requests payment leaving the homeowner with a still damaged home.

In other cases, the contractor working with a less than honest law firm will dramatically increase the cost of repairs and then sue the insurance company when the claim is denied. Due to the cost of litigation many insurance companies will settle the claim out of court and pass the cost of these lawsuits on to other homeowners via higher premiums.

On the other side of the fence, contractors and lawyers feel that the assignment of benefits process forces insurance companies to properly pay claims.

What Can Be Done?

Atwater called for changes to existing laws while also being careful to avoid the appearance of favoring the insurance industry.

“We never want to harm any individual out there in getting the absolute quick and full coverage they deserve on a claim,” said Awater. “But the majority of this right now is costing the honest Floridian tremendous pain.”

One of the major concerns Atwater and other Florida officials have is the increase in homeowner rates as well as the possibility that insurers will pull out of certain areas.

“We are going to continue to see homeowners’ insurance companies raise their rates for our consumers in a best-case scenario, and in a worst-care scenario, just simply stop offering their products in certain regions of the state,” said Insurance Commissioner David Altmaier.

In the spring the Florida house approved a bill (HB 1421), which would have made several changes to the current law to help curb litigations regarding assignment of benefit claims. The Senate did not take up the bill due to opponent’s criticism that the bill was too favorable to insurance companies.

It is highly likely that the subject will be addressed in the coming session of the Florida legislature but as it stands now the current laws still allow assignment of benefits contracts for home repairs.

Dealing with a Claim

Here are a few quick tips for dealing with the claim to make sure that you are paid fairly and quickly:

• Never Sign an AOB Form: In most cases the only contractors using these forms are less than honest. In almost all cases you should handle your claim yourself and deal directly with your insurance company or adjuster.
• Notify Your Insurer Immediately: As soon as it is safe, notify your insurance company so they can send an adjuster out and get working on your claim
• Take photos and Video: You should document your claim as soon as possible. Take video and photos of all the damage and be sure to shoot photos from a variety of angles. This will document your claim and also help the adjuster assess the damage.
• Inventory Your Losses: If you suffered losses of personal property you should also document and list all of the possessions you have lost. Keeping up-to-date home inventory will help with this process.

Getting the Best Florida Coverage

For homeowners living in Florida, we have an easy way for you to shop online and get the best rates and coverage options available. We have 30 different Florida home insurance companies we will review for you and present the best prices and policy options. Our quoting process is free and easy to use. Simple click, Get Florida Home Insurance Quotes Now or give us a call at 888-685-4704. We look forward to working with you!