Yet again, the Florida Legislature is poised to take away the rights of its own constituents—building owners—in favor of insurance companies with “Assignment of Benefits” Legislation.
Despite the gentle treatment by Mother Nature in the last decade, have you noticed your property insurance premiums going down? Remember when insurance companies took away your sinkhole coverage in 2011? Have you noticed a reduction in premiums as a result? No?
Prepare yourselves to be sold down the river by the people you elected yet again.
The big target to put more money in insurance companies’ pockets this year is the “assignment of benefits” or “AOB” for short. An AOB in this instance is a building owner’s contractual right to transfer an insurance claim to another party—here a restoration contractor. So when insurance companies lowball and refuse to pay what is owed for the repairs, the building owner can move forward with getting the repairs done and move on with life and not be strong armed by threats that the insurer will go after them for attorney fees. Instead, the contractor—presumably a business less apt to be bullied in litigation—can sue the insurer directly.
More and more, restoration contractors in South Florida are calling the insurance companies out on their lowball payments for water damage claims and holding them accountable by filing breach of contract lawsuits based on their AOB’s received from building owners. Insurance companies claim the number of AOB claims in Florida “exploded from 405 to 28,000 in 2016.” It begs the question: If these claims are fraudulent, why have reports of fraud to the Office of Insurance Regulation only gone from 77 to 226?
Could it be because the claims are not fraudulent? Could it be the insurance companies are creating the situation by underpaying claims, falsely claiming contractors are overbilling, and using that excuse to influence lawmakers to further cut their customers’ benefits?—such as attempting to take away an insured’s or an assignee’s right to recover attorney fees if you win against an insurance company—putting more profit in their own pockets?
And here is another question: If these water damage AOB claims are so fraudulent, why are the insurance companies settling them? Why not take the claims to trial, and if it is proven the claim is fraudulent, go after the restoration contractor for attorney fees?
Luckily, Florida consumers have a champion in Senator Gary Farmer, who has proposed a competing bill that would require restoration contractors to have proper licensing and give sooner notice to the insurance companies upon receiving an AOB and before filing suit for breach of the policy. http://www.sun-sentinel.com/business/fl-bz-sen-farmer-aob-bill-20170301-story.html
Don’t throw the baby out with the bathwater. Protections against fraud can be made as demonstrated by Senator Farmer’s proposal without taking away the rights of Florida building owners. Pay attention and let your elected officials know you will hold them accountable if they sell off your rights to assign an insurance claim or recover attorney fees with the “Assignment of Benefits” law if it is determined an insurance company low balled your claim.
Kristin Demers-Crowell is a 19-year attorney with the law firm of Christopher Ligori & Associates, specializing in forcing insurance companies to pay what is owed to building owners after losses from fire, storms, sinkholes, pipe bursts and other causes. She offers free consultations. No recovery, no fees.