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Assignment of Benefits Abuse: A Disturbing Trend Harming Florida Homeowners

by BROOKE GOLD HASSON | Dec 10, 2015

AOBFraudNewsAs the state gears up for an early legislative session, we want to update Florida homeowners on one of the leading insurance issues needing to be addressed in 2016 – Assignment of Benefits abuse.

Bills addressing Assignment of Benefits abuse have been filed the last three legislative sessions, but failed as a result of intense lobbying from trial attorneys and contractors who benefit from the scheme. 

But state leadership is not giving up on protecting the rights of Florida homeowners. Senator Dorothy Hukill filed Senate Bill 596 on October 21, 2015. If passed, SB 596 would help stop these fraudsters in their tracks.

Under the Assignment of Benefits process, shady contractors working closely with trial lawyers require homeowners to sign a broadly worded contract before making repairs. Then, they overstate the repair bill and file hefty lawsuits against the policyholder’s insurer.

We all pay the price for AOB abuse. Since 2000, Assignment of Benefits lawsuits have increased by 16,000 percent!

How bad is Assignment of Benefits abuse and how could it impact you? We’ve rounded up the latest updates on this disturbing trend harming Florida homeowners:

Storm Insurance Reforms Still Needed, Expert Says

Published by Florida Politics | October 26, 2015

The James Madison Institute and R Street Institute released a policy brief last week, “Shoring Up Florida’s Property Insurance Market,” in which the organizations argue for the Legislature to pass reforms to “eliminate cost drivers and ensure fiscal stability in an active storm season.” The policy brief also argues for lawmakers to reform the “assignment of benefits” regimen, “when a third party – such as a contractor or water-extraction company – assumes a policyholder’s benefits and collects payments directly from the insurer…” Read More

Florida Insurers' Appeal, Over Assignment of Benefits, Rejected By Court

Published by the Orlando Sentinel | October 26, 2015

An appeals court Monday pointedly said it is up to state lawmakers — not the court system — to tackle a controversial issue in the insurance industry known as “assignment of benefits.” The issue in the case involves homeowners signing over policy benefits to contractors… Read More

Assignment of Benefits ... The Predators!

Published by Johnson Strategies, LLC | October 9, 2015

Despite Governor Scott’s inaugural pledge that “…we WILL NOT ALLOW a small group of predatory lawyers to stalk the business community in search of deep pockets…”, it appears that’s exactly what’s happening. At least with respect to residential property insurers a number of law firms seem to be working with way too many willing emergency remediators and “recruiters” in a massive “…litigation for profit scheme…" Read More

Steep Increase in Water-Loss Claims in South Florida Keeps Local Insurance Rates From Lowering

Published by Pekar Law P.A. | September 18, 2015

According to the insurance industry and supporters in the state legislature, this steep rise in claims is largely due to fraudulent activity. For more than 3 years, in spite of the apparent spike in fraudulent claims, attempts made to pass legislation to restrict a homeowner's ability to sign over benefits to restoration companies have failed… Read More

Assignment of Benefits – The Fight!

Published by Johnson Strategies, LLC | August 3, 2015

Since the courts have punted AOB reform to lawmakers, we now know who, and to some extent how, to give consumers needed reforms.  That doesn’t mean that the executive branch isn’t needed to assist. Indeed…it doesn’t mean that its’ inaction or decision making, so far, isn’t partially responsible for the continuing consumer abuse... Read More

Florida Homeowner Insurers Deluged by Assignment of Benefit Lawsuits

Published by Claims Journal | June 23, 2015

2015 has already been a brutal year for insurance companies which provide homeowners’ coverage in Florida. The problem for property insurers? No one is willing to take a firm position against the surge of Assignment of Benefits (AOB) lawsuits, which are proliferating to the point where they are in danger of strangling insurers. The Courts are deferring to the Legislature but the Legislature is seemingly uninterested in making change… Read More

Roof Investigation Finds Questionable Wind Damage Claims

Published by Click Orlando | June 1, 2015

Storms are nothing new to Florida. But beware, there are roofers out there who talk homeowners into a new roof. A video shows a roofer purposefully ripping up shingles, scraping away some of the adhesive and outlining the “fake wind damage” in chalk. A roofer created damage by spinning a dime on shingles attempting to show hail damage. Industry insiders call this “manufactured damage…” Read More

Want to read more information and commentary on how this abuse is driving up your insurance costs? Here are a few other sources you can check out:

Home Repair Insurance Claim Fraud Hammering Florida

Published by the Tampa Tribune | January 23, 2015

Consumers Need Legislative Fix to Home Repair Scam

Published by Miami Herald | July 19, 2015

‘Assignment of Benefits’ a Bonanza for Trial Lawyers and Vendors, Bad for Consumers

Published by Saint Petersblog | March 26, 2015

Mark Wilson Says Assignment of Benefits Next Big Florida Chamber Insurance Priority

Published by Saint Petersblog | October 27, 2015 

Insurers Vow to Keep Up Fight Against Benefits Abuses

Published by Sun Sentinel | October 27, 2015