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How Will the New Florida AOB Law Affect Your Homeowner’s Insurance?

[/vc_column_text][vc_column_text]After seven years of commitment to the cause, the reformed assignment of benefits (AOB) officially became Florida law this past July 1, 2019 with the final signature from Governor Ron DeSantis.  What is common practice among insurance policies nationwide, has opened a door to unethical attorneys and unlicensed contractors exploiting Florida’s lackadaisical laws surrounding the AOB system.  To cover the increase in attorney fees and litigation costs billed to the insurance providers, these companies have little choice but to raise already high premium rates at the expense of the homeowner.  In contrast to the nationwide consistent percentage rates of AOB lawsuits over time, Florida’s rates have increased 94% in only a five-year span from 2013 to 2018 (“III”).  Citizens Property Insurance Corp., one of the companies significantly impacted by the AOB abuse, proposed increased rates for 97% of its policyholders to offset the litigation costs (“Update: Florida Legislature Passes Industry-Backed AOB Reform Bill”).

When an AOB is properly utilized, the contractual agreement allows policyholders to assign their rights within the policy over to a contractor.  The contractor then provides any necessary services covered under the policy and bills the insurance company upon job completion. When executed with the intentions it was designed for, an AOB can eliminate lengthy claims processes and prevent further damage from accruing.  Rather than time spent waiting on insurance to authorize repairs, an AOB permits contractors to fix the problem immediately and more efficiently.

Unfortunately, Florida laws allow room for fraudulent practices at the expense of uninformed consumers and insurance providers. Prior to the reformed law, many insured parties were assigning benefits over to unlicensed contractors without notifying their insurance company.  With the insurance company in the dark, anyone could report inflated costs of repairs, perform unnecessary tasks to pad the bill, or falsify charges for work that never occurred.  In response to insurers’ disputes, cooperating attorneys filed lawsuits alleging bad faith or breach of contract against the insurers.

Until recent bill revisions, plaintiffs had the upper hand in virtually every litigation scenario against the insurance companies.  Provisions initially created as a “checks and balance” system between insurance conglomerates and the consumers backfired, handing over majority power to unlicensed contractors and their attorneys.  Insurers were obligated to pay uncapped plaintiff fees if they lost in court.  Even before a lawsuit went to trial, insurers paid the settlement price to avoid the costlier option of going to court.  In the cases that ruled in favor of the insurance companies, plaintiffs were not expected to pay court fees incurred by the insurers.

After years of AOB abuse resulting from misinformed consumers, predatory practices, and insurance providers struggling to pay the increasing litigation costs, Florida’s homeowners are facing the repercussions of inflated premiums with little coverage.  Consumers can expect to benefit from the significant decreases in policy premium rates because of the recent law amendments.  Some of the most noteworthy changes of the AOB law include:

*For a more complete list of the current AOB revisions and other information visit here.

Sources:

 

Assignment of Benefits,

www.myfloridacfo.com/Division/Consumers/AssignmentofBenefits.htm.

“III.” Insurance Information Institute, Mar. 2019,

www.iii.org/sites/default/files/docs/pdf/aobfl_wp_031319.pdf.

“Update: Florida Legislature Passes Industry-Backed AOB Reform

Bill.” Insurance Journal, 27 Apr. 2019,

www.insurancejournal.com/news/southeast/2019/04/24/524700.htm.

 [/vc_column_text][/vc_column][/vc_row][vc_row type=”in_container” full_screen_row_position=”middle” scene_position=”center” text_color=”dark” text_align=”center” overlay_strength=”0.3″ shape_divider_position=”bottom” bg_image_animation=”none” shape_type=””][vc_column column_padding=”no-extra-padding” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_link_target=”_self” column_shadow=”none” column_border_radius=”none” width=”1/4″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” column_border_width=”none” column_border_style=”solid” bg_image_animation=”none”][/vc_column][vc_column column_padding=”no-extra-padding” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_link_target=”_self” column_shadow=”none” column_border_radius=”none” width=”1/2″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” column_border_width=”none” column_border_style=”solid” bg_image_animation=”none”][vc_column_text]GreenLight is the #1 construction and contractor debt recovery assistance. Contact an expert at GreenLight Maximum Recovery for guidance. [/vc_column_text][nectar_btn size=”medium” button_style=”regular” button_color_2=”Accent-Color” icon_family=”none” url=”tel: 18334675436″ text=”Call Us Today”][/vc_column][vc_column column_padding=”no-extra-padding” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_link_target=”_self” column_shadow=”none” column_border_radius=”none” width=”1/4″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” column_border_width=”none” column_border_style=”solid” bg_image_animation=”none”][/vc_column][/vc_row]