No Action Taken by Florida Legislature!!!

No Action Taken by Florida Legislature to Help Protect Homeowners from Out-of-Control Contractors and Plaintiff Lawyers in Assignment of Benefits (AOB) Claims

Hurricane season is upon us. If your home floods be it by storm, plumbing failure or a careless family member, the insurance claim and repair process is a challenge that you will not soon forget. The Florida Legislature attempted to tackle legislation that could fix what the Florida Property & Casualty Association calls “a looming insurance crisis organized and carried out by unscrupulous vendors and lawyers in what has developed into a rapidly growing lawsuit-for-profit scheme.”

The “scheme” is more properly referred to as “Assignment of Benefits Contract” or “AOB”. Here’s an easy explanation from insurance claim expert Mark Goldwich of Goldstar Adjusters:

When you visit a doctor’s office or other medical facility, they will usually require that you sign a form called “Assignment of Benefits”. These forms are used by your medical providers to bill your insurance company directly for the services. The AOB allows them to access your insurance benefits rather than getting direct payment from you”.

Flooded Neighborhood“In a homeowner’s insurance claim the assignment of benefits during a property insurance claim lets contractors bill the insurance company directly for the services they perform at your home.”

This practice is intended to allow work to be done without upfront payment from you. If the contractor and insurance company are acting in your best interest, it does make your life simpler.

x flood dry equipmentIt can also be an opportunity for excess charges or fraud against your insurance company. According to the National Association of Insurance Commissioners, the average premium to insure a home in Florida topped $2,000 for the first time this year and is more than double the national average!

Jacksonville based remediation company MicroTech President, Brian Sobolewski, believes as do many experts, that this increase may be directly related to Assignment of Benefits Contracts.  “The AOB gives the contractor the same legal rights as you, the insured, and is an avenue for some contractors to unethically profit from your insurance claim.”

The MicroTech position is that you should “never sign an AOB contract or sign up with a contractor using one.  It could be financially dangerous!”

Hurricane Surge Flooding Northeast Florida Coast

Hurricane Surge Flooding Northeast Florida Coast

In a public letter to the Florida Senate Judiciary Committee, Demotech, Inc., a financial analysis and actuarial services company warned how the increasing use and abuse of assignments could reduce market capacity. Said Demotech, “Should this cost differential associated with assignment of benefits be representative and the acceleration of assignments, the underlying financial stability of insurance carriers that have focused on rebuilding Florida’s property insurance market place would be unfavorably impacted.”

The Florida legislator has had homeowners insurance on its agenda for decades. It is an immensely complicated issue that pits some of the most powerful lobbying groups at extreme odds with each other.

San Marco Flooding

San Marco Flooding

As a real estate professional and as a homeowner, your only point of control is being educated on how you can best navigate the maze of coverages, contracts and claims BEFORE you home suffers a fire, flood or mold infestation.  And regarding flood damage, if you don’t have flood insurance, you don’t have a claim!



x -water-damage-restorationLooking to get your own insurance house in order? Or looking to bring a spirited educational session to your office? My go to expert for coverage is Jeff Stoneking at Brightway, for claims Mark Goldwich at Goldstar Adjustors and for remediation Brian Sobolewski at MicroTech.  You can find them listed as “trusted contractors” at do it today! Once your home is damaged, it’s too late to educate!

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