ASSIGNMENT OF BENEFITS ABUSE IS A BIG PROBLEM
Assignment of Benefits (AOB) abuse is rampant in Florida. It is driving up home insurance premium rates, and it is causing homeowners to commit insurance fraud without knowing it.
AOB is a type of home repair insurance scam in which shady contractors team up with public adjusters and trial lawyers. After convincing the homeowner to sign a broadly worded contract, they overstate the repair bill and file a hefty lawsuit against the insurance company, often leaving the homeowner caught in the middle of a claims nightmare. And sometimes, the homeowner is completely unaware of the lawsuit that’s been filed. To put it in perspective, 8% of all home insurance claims in the United States are filed in Florida, yet 78% of all money paid out for home insurance claims in the country is paid out in Florida! This is due to AOB fraud and is costing homeowners millions of dollars in excessive premiums.
HOW TO AVOID ASSIGNMENT OF BENEFITS ABUSE:
Fortunately, Assignment of Benefits abuse is preventable. Here are some simple steps you can take to avoid getting caught in the middle of a home repair insurance scam with your contractor.
1. Use a Recommended, Licensed Contractor
Don’t hire a public adjuster or contractor based solely on an ad you saw online or in your local newspaper. Get recommendations from friends, family, and neighbors, and verify they are licensed by clicking on the “Verify a license tab” at www.myfloridalicense.com/dbpr. Or, through the Florida DFS Public Record, search the Florida Department of Business and Professional Regulation to confirm that the contractor you plan to use has the required license or registration.
2. Do Your Research
Before hiring a public adjuster or contractor, research what other people are saying about them online. Request a list of references and visit the sites to verify the quality of the work, if possible. Several complaints and a low rating are potential indicators of shady business practices. Call former customers who had similar work done to ensure they were satisfied with the job.
3. Never Pay in Full Up Front
Public adjusters or contractors are typically paid after a claim is handled. Never pay in full upfront, and be leery of public adjusters who only accept cash payments. If you’re asked to put down a deposit, it should be no more than 25 to 33 percent of the total job cost. After the work is completed, wait to make your final payment until you receive a lien waiver stating that everything has been paid for.
4. Get it ALL in Writing
That includes estimates, contracts, overages, and guarantees. Before doing anything, get at least 2 estimates in writing to ensure fair pricing. Get your final contract and a complete list of services in writing before work begins, including a detailed list of the repair work to be done, costs, materials, start and completion dates, and warranty or guarantee information. And make sure their policy is to put all change orders and overages in writing.
5. Ask for proof of insurance
Make sure the contractor carries general liability insurance and workers' compensation. If the contractor is not insured, you may be liable for accidents that occur on your property.
6. The Work is Done When YOU Say it’s Done
First, make sure all the work completed is inspected by your city or county building inspector. Then, you can decide if the work is done to your satisfaction. If it’s not, then they need to make it right until you are satisfied. Pay only after you are completely satisfied.
7. Report Fraud
Florida homeowners can cancel a home repair contract within three to five days of signing. If you suspect fraud, notify People’s Trust immediately and report it to the Florida DFS Division of Insurance Fraud, either online or by calling toll-free 1-800-378-0445.
8. Call Your Insurer First in the Event of a Loss
In the event of a loss, call People’s Trust first. We’ll help you review your policy to ensure you understand your coverage which may include additional Endorsements listed on your declaration page.
Remember, at People’s Trust Insurance, your policy entitles you to 24/7 emergency service and covered damage repairs. Our preferred contractor may be deployed to your home to help mitigate damage and get the ball rolling on recovery. Filing a claim after a loss is nerve-wracking enough; the last thing you should have to worry about is a home repair insurance scam. Following these tips can help keep you (and your home) safe.
Protecting Your Pocketbook
The Consumer Protection Coalition created a guide to help protect Florida homeowners like you from Assignment of Benefits (AOB) fraud and abuse, including knowing the risks of signing an AOB and how to avoid becoming an AOB scam victim. Download your free guide to AOB fraud and abuse.
Report Home Repair Fraud
If you suspect fraud, immediately notify your home insurance company and report it to the Florida Division of Insurance Fraud, either online or by calling toll-free 800-378-0445.
We hope this helps you understand what to look for in hiring a reputable contractor if you experienced damage to your home.
Please Call Us First if you have a claim, and let us know how we can help! Call 561-609-1002, option 1.
Assignment of Benefits (AOB) abuse is rampant in Florida. It is driving up home insurance premium rates, and it is causing homeowners to commit insurance fraud without knowing it.
AOB is a type of home repair insurance scam in which shady contractors team up with public adjusters and trial lawyers. After convincing the homeowner to sign a broadly worded contract, they overstate the repair bill and file a hefty lawsuit against the insurance company, often leaving the homeowner caught in the middle of a claims nightmare. And sometimes, the homeowner is completely unaware of the lawsuit that’s been filed. To put it in perspective, 8% of all home insurance claims in the United States are filed in Florida, yet 78% of all money paid out for home insurance claims in the country is paid out in Florida! This is due to AOB fraud and is costing homeowners millions of dollars in excessive premiums.
HOW TO AVOID ASSIGNMENT OF BENEFITS ABUSE:
Fortunately, Assignment of Benefits abuse is preventable. Here are some simple steps you can take to avoid getting caught in the middle of a home repair insurance scam with your contractor.
1. Use a Recommended, Licensed Contractor
Don’t hire a public adjuster or contractor based solely on an ad you saw online or in your local newspaper. Get recommendations from friends, family, and neighbors, and verify they are licensed by clicking on the “Verify a license tab” at www.myfloridalicense.com/dbpr. Or, through the Florida DFS Public Record, search the Florida Department of Business and Professional Regulation to confirm that the contractor you plan to use has the required license or registration.
2. Do Your Research
Before hiring a public adjuster or contractor, research what other people are saying about them online. Request a list of references and visit the sites to verify the quality of the work, if possible. Several complaints and a low rating are potential indicators of shady business practices. Call former customers who had similar work done to ensure they were satisfied with the job.
3. Never Pay in Full Up Front
Public adjusters or contractors are typically paid after a claim is handled. Never pay in full upfront, and be leery of public adjusters who only accept cash payments. If you’re asked to put down a deposit, it should be no more than 25 to 33 percent of the total job cost. After the work is completed, wait to make your final payment until you receive a lien waiver stating that everything has been paid for.
4. Get it ALL in Writing
That includes estimates, contracts, overages, and guarantees. Before doing anything, get at least 2 estimates in writing to ensure fair pricing. Get your final contract and a complete list of services in writing before work begins, including a detailed list of the repair work to be done, costs, materials, start and completion dates, and warranty or guarantee information. And make sure their policy is to put all change orders and overages in writing.
5. Ask for proof of insurance
Make sure the contractor carries general liability insurance and workers' compensation. If the contractor is not insured, you may be liable for accidents that occur on your property.
6. The Work is Done When YOU Say it’s Done
First, make sure all the work completed is inspected by your city or county building inspector. Then, you can decide if the work is done to your satisfaction. If it’s not, then they need to make it right until you are satisfied. Pay only after you are completely satisfied.
7. Report Fraud
Florida homeowners can cancel a home repair contract within three to five days of signing. If you suspect fraud, notify People’s Trust immediately and report it to the Florida DFS Division of Insurance Fraud, either online or by calling toll-free 1-800-378-0445.
8. Call Your Insurer First in the Event of a Loss
In the event of a loss, call People’s Trust first. We’ll help you review your policy to ensure you understand your coverage which may include additional Endorsements listed on your declaration page.
Remember, at People’s Trust Insurance, your policy entitles you to 24/7 emergency service and covered damage repairs. Our preferred contractor may be deployed to your home to help mitigate damage and get the ball rolling on recovery. Filing a claim after a loss is nerve-wracking enough; the last thing you should have to worry about is a home repair insurance scam. Following these tips can help keep you (and your home) safe.
Protecting Your Pocketbook
The Consumer Protection Coalition created a guide to help protect Florida homeowners like you from Assignment of Benefits (AOB) fraud and abuse, including knowing the risks of signing an AOB and how to avoid becoming an AOB scam victim. Download your free guide to AOB fraud and abuse.
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If you suspect fraud, immediately notify your home insurance company and report it to the Florida Division of Insurance Fraud, either online or by calling toll-free 800-378-0445.
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Please Call Us First if you have a claim, and let us know how we can help! Call 561-609-1002, option 1.