florida insurance assignment of benefits

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The Current State of Assignment of Benefits Litigation in Florida

florida insurance assignment of benefits

By: Senior Counsel Nhan T. Lee with Associate Wayne A. Comstock

Homeowners typically experience property damage and use contractors to repair the damage as quickly as possible. [4] An assignment of benefits, or AOB, is an agreement “in which a contractor begins the work [on the property owner’s home] without charging the property owner and agrees to seek compensation from the insurer.” [5] An AOB can be beneficial to a homeowner because an AOB eliminates the processing of a claim through the insurance company. [6] Without contacting the insurance company, “the insured can hire a contractor, wait for the contractor to finish the work, then pay the deductible.” [7] Despite the time saving benefit to a homeowner, AOBs can lead to costly litigation and higher premiums. [8]

In Florida, AOB abuse first started with Personal Injury Protection (“PIP”) claims. [9] A PIP claim works similar to an AOB property damage claim. [10] In a PIP claim, “[t]he assignment lets a medical provider seek reimbursement for their services directly from an insurer. The injured person receives medical care and does not have to deal directly with their insurance company.” [11] PIP claims led to abuse because plaintiff’s attorneys filed many lawsuits on behalf of the assignee “for inflated claims or potentially unnecessary medical treatment.” [12]

Prior to 2019, AOBs frequently resulted in costly litigation primarily because Florida law provided for one-way attorney’s fee provisions. [13] In a first-party lawsuit, Florida law required insurers to pay plaintiff’s attorneys a court determined “reasonable sum.” [14] However, Florida law did not require plaintiffs to compensate the insurer’s attorneys. [15] This imbalance pressured insurers to settle claims “rather than face expensive litigation, which, if they lose, means they must pay the other side’s lawyers.” [16]

The public policy rationale supporting one-way attorney’s fee provisions in Florida stems from Feller v. Equitable Life Assurance Soc. [17] In Feller , the Supreme Court of Florida described the purpose of one-way attorney’s fee provisions as “to discourage the contesting of policies in Florida courts, and to reimburse plaintiffs reasonably their outlay for attorney’s fees when suing in Florida courts.” [18] In Ivey v. Allstate Ins. Co. , the Supreme Court of Florida further described the rationale behind one-way attorney’s fee provisions as “to level the playing field so that the economic power of insurance companies is not so overwhelming that injustice may be encouraged because people will not have the necessary means to seek redress in the courts.” [19] AOBs defeat the purpose of one-way attorney’s fee provisions because AOBs do not serve those individuals one-way attorney’s fee provisions are meant to protect: the policyholder and any beneficiaries the policyholder designates. [20]

The Florida legislature enacted PIP reforms in 2012 that curbed “AOB abuse in auto insurance.” [21] However, around the same time, AOB abuse began spreading to property damage claims. [22] Vendors targeted homeowners insurers because Florida is home to a large number of insured homes, “which ensures large claimant and plaintiff pools.” [23] In addition, hurricanes and tropical storms in Florida carry the risk of water damage. [24] In Florida, “[w]ater damage repairs often need to be undertaken immediately to prevent further damage.” [25] To complicate matters further, “the standard homeowners policy requires that policyholders protect their property from further damage by making reasonable and necessary repairs.” [26] A homeowners policy is more attractive than an auto insurance policy because the average loss is higher: $11,000 compared with $1,300. [27] The higher threshold means that a homeowner assignee in a property claim can potentially “inflate repair bills to a greater degree.” [28] As a result of increasing AOB litigation, insurers raised premiums. [29] For example, “the average premium [in Florida] rose 30 percent between 2007 and 2015.” [30] AOB abuse is most pronounced in Florida because “insurers’ legal costs are rising much faster than losses from homeowners claims” compared with other states. [31]

In an effort to curtail AOB abuse, the Florida legislature enacted significant reforms to AOBs and the one-way attorney’s fee provision. [32] The legislation, enacted on July 1, 2019, “require[d] assignment agreements to be in writing and signed by both the assignee and assignor.” [33] Other changes to AOB agreements included allowing “assignors to rescind without penalty within seven days of the execution of the agreement” and obligating “[a]ssignees . . . [to] provide a copy of an assignment agreement to an insurer within three business days of the execution of the agreement.” [34] The most notable difference, however, involved the one-way attorney’s fee provision where the provision “no longer applies to an assignee.” [35] Instead, the 2019 reforms encouraged insurers to avoid litigation through negotiation or appraisal. [36] In a lawsuit involving an AOB agreement, attorney’s fees may only be recovered as follows:

Less than 25 percent of the disputed amount, the insurer is entitled to an award of reasonable attorney fees.
At least 25 percent but less than 50 percent of the disputed amount, no party is entitled to an award of attorney fees.
At least 50 percent of the disputed amount, the assignee is entitled to an award of reasonable attorney fees. [37]

As companion legislation, the Florida legislature also passed Fla. Stat. 627.7153. [38] Under Fla. Stat. 627.1753, an insurer may restrict an insured’s “right to execute an assignment agreement” if the insurer provides (1) an insurance policy that does not restrict the insured’s “right to an execute an assignment agreement[,]” (2) the restricted policy at a lower cost compared with the unrestricted policy, (3) the policy restricting or prohibiting assignment in whole at a “lower cost than any policy [restricting or] prohibiting assignment in part[,]” and (4) specific language in any restricted policy as described in the statute. [39]

The Florida legislature enacted the 2019 reforms, in part, to reduce insurance premiums for Florida homeowners. [40] In the year following the reform, Citizens Property Insurance Corporation (“CPIC”), reported that insurance premiums dropped for almost 44,000 policyholders. [41] In addition, the reform helped reduce AOB litigation. [42] In 2020, “Florida [saw] less first party cases being filed . . . . CPIC alone [saw] their caseload drop from 2,000 to 1,750 suit per month.” [43] Despite the reduction, Florida lawmakers remained concerned about AOB abuse. [44]

In May 2022, the Florida Legislature approved additional property insurance reforms. [45] The reforms further limit the awarding of attorney’s fees in AOB cases. [46] The reform, titled SB 2D, prohibits a court from awarding attorney’s fees to an assignee in AOB litigation. [47] The reforms also severely “restrict the awarding of fee multipliers in property insurance disputes to ‘rare and exceptional circumstances.’” [48] Florida lawmakers believed such reforms necessary given Florida’s excessive contribution to homeowner insurance lawsuits across the United States. [49] Florida, responsible for “just 9% of property insurance claims, generates 79% of the nation’s homeowner insurance lawsuits.” [50] Florida lawmakers approved the reforms under the belief that “lawsuits . . . exploded in the past several years” despite the 2019 reforms. [51]

While Florida lawmakers acted to protect homeowners, [52] contractors rallied against the reform. [53] In June 2022, the Restoration Association of Florida and Air Quality Assessors, LLC, “filed [a] lawsuit in Leon County circuit court” testing the constitutional validity of the legislation. [54] In filing the lawsuit, “contractors contend that assignment of benefits helps homeowners who are unfamiliar with making sure insurance claims are handled properly.” [55] Contractors believe that AOBs help homeowners quickly address home damage due to inclement weather and other unforeseen circumstances. [56]

In Florida, contractors and Florida lawmakers are seemingly at odds with respect to AOBs. [57] The 2022 reforms remove the awarding of attorney’s fees altogether from AOB litigation, [58] which may both help and hurt homeowners in Florida by lowering property insurance premiums but making immediate home repair less accessible. AOBs will remain a contentious issue moving forward, and the reforms may lead to additional challenges.

[1] Jim Ash, Governor Signs Property Insurance Reforms and Condo Safety Measures , Florida Bar (May 27, 2022), https://www.floridabar.org/the-florida-bar-news/governor-signs-property-insurance-reforms-and-condo-safety-measures/.

[2] Mark Delegal & Ashley Kalifeh, Restoring Balance in Insurance Litigation: Curbing Abuses of Assignments of Benefits and Reaffirming Insureds’ Unique Right to Unilateral Attorney’s Fees 9 (2015), https://www.fljustice.org/files/123004680.pdf.

[3] Douglas Scott MacGregor, Florida Takes Aim at Assignment of Benefits Abuse: A Home Run or a Swing and a Miss? , in New Appleman on Insurance: Current Critical Issues in Insurance Law (2021).

[9] Ins. Info. Inst., Florida’s Assignment of Benefits Crisis: Runaway Litigation Is Spreading, and Consumers Are Paying the Price 7 (2018).

[12] Id. at 8.

[13] Id. at 4.

[17] Feller v. Equitable Life Assurance Soc. , 57 So. 2d 581, 583 (Fla. 1952).

[19] Ivey v. Allstate Ins. Co. , 774 So. 2d 679, 684 (Fla. 2000).

[20] Delegal & Kalifeh, supra note 2, at 3.

[21] Ins. Info. Inst., supra note 9, at 12.

[23] Id. at 13.

[24] What You Should Know About Water Damage in Your Home or Business , Kanner & Pintaluga, https://hurricanedamage.com/blog/what-to-know-about-water-damage/.

[25] Ins. Info. Inst., supra note 9, at 13.

[29] Id. at 14.

[32] Fred E. Karlinsky, Esq., Florida Assignment of Benefit Abuse: Recent Developments, Fed’n of Regul. Couns., https://www.forc.org/Public/Journals/2019/Articles/Summer/Vol30Ed2Article1.aspx.

[36] Cozen O’Connor, Florida’s “Assignment of Benefits” Bill: A Guide Through the New Statutory Framework , JDSupra (Apr. 26, 2019), https://www.jdsupra.com/legalnews/florida-s-assignment-of-benefits-bill-a-29861/.

[37] Fla. Stat. § 627.7152(10)(a) (2019).

[38] Fla. Stat. § 627.7153 (2019).

[39] Id. § 627.7153(2)(a)-(d).

[40] O’Connor, supra note 36.

[41] Rumberger Kirk, Impact of Florida’s New Assignment of Benefits Law: HB 7065 , JDSupra (May 26, 2020), https://www.jdsupra.com/legalnews/impact-of-florida-s-new-assignment-of-80753/.

[44] Ash, supra note 1.

[53] Jim Saunders, Contractors Challenge New Florida Insurance Law , Law (June 1, 2022), https://www.law.com/dailybusinessreview/2022/06/01/contractors-challenge-new-florida-insurance-law/.

[57] Ash, supra note 1; Saunders, supra note 53.

[58] Ash, supra note 1.

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Assignment of Benefits in Florida Will Soon Be Dead and Are Now Critically Examined

Recent Florida legislation makes the assignment of benefits for a property insurance policy illegal in Florida. Recent cases demonstrate that such assignment of benefit contracts will be critically examined by courts when insurance companies raise issues about their validity.

Last week, a Florida appellate Court ruled that a proposed assignment of benefit contract was void. 1 It noted the insurer’s argument and the issue to be determined:

Citizens moved to dismiss the complaint with prejudice, contending that the assignment of benefits agreement, on its face, failed to comply with section 627.7152(2) (a)4., Florida Statutes (2021) (requiring that an assignment of benefits agreement ‘[c]ontain a written, itemized, perunit cost estimate of the services to be performed by the assignee’) rendering the assignment agreement invalid and unenforceable. Id. § 627.7152(2)(d) (providing: ‘An assignment agreement that does not comply with this subsection is invalid and unenforceable.’) More specifically, Citizens contended the assignment agreement did not contain ‘a written, itemized, per-unit cost estimate of the services to be performed by assignee’ as required by the statute. In response, Total Care contended that the assignment agreement contained an itemized per-unit cost estimate in compliance with the statute; Citizens lacked privity to challenge the assignment agreement; and non-compliance with the statute would render the assignment agreement voidable, not void, and—if voidable— Citizens would have no standing to challenge the assignment agreement since it was not a party to, or third-party beneficiary of, the assignment agreement.

The court noted that prior legislation required an estimate which was itemized:

Enacted by the legislature in 2019, section 627.7152, Florida Statutes (2021), governs assignment of benefits agreements. Subsection (2)(a) enumerates several requirements for a valid and enforceable assignment of benefits agreement. Relevant to the instant case, the statute requires: ‘An assignment agreement must… [c]ontain a written, itemized, per-unit cost estimate of the services to be performed by the assignee.’… In addition, section (2)(d) provides: ‘An assignment agreement that does not comply with this subsection is invalid and unenforceable.’

A mere listing of costs and services was found not to be sufficient:

While Total Care contends this document meets the statute’s requirement of ‘a written, itemized, per-unit cost estimate of the services to be performed by the assignee,’ we conclude it falls far short. It is not tailored to the insured or to the services to be performed on this particular property. Instead, it is simply a listing of services offered by Total Care, divided into two categories—’Emergency Service Price’ and ‘Non-Emergency Prices.’ The services listed under the two categories overlap nearly completely (the emergency category lists twenty-two services, while the non-emergency category lists eighteen identical services), with the difference being the cost of an available service performed on an emergency versus nonemergency basis. Such a generic menu of services available to any customer manifestly fails to comply with the ‘itemized, per-unit cost estimate of the services to be performed’ required by section 627.7152(2)(a) 4. Indeed, this document is not an ‘estimate’ at all, because it fails to set forth: the specific services being performed by Total Care on Mr. Bernal’s property;….”

The court cited with approval a similar case ruled upon last year:

We find persuasive the reasoning and holding of our sibling court in Air Quality Experts Corp. v. Fam. Sec. Ins. Co. , 351 So. 3d 32 (Fla. 4th DCA 2022), which is indistinguishable in all material respects from this case. In Air Quality, an assignee under a homeowner’s property insurance assignment agreement submitted bills to the insurer. When the insurer refused to pay, the assignee sued, attaching to the complaint the assignment agreement contract and two invoices. The assignment agreement included ‘a standard price list of the types of services offered by the assignee with their unit price.’ As the Fourth District explained, ‘[t]here was nothing in the attachment which tied the price list to the insured’s home so that it could be considered an estimate.’

The bottom line is that restoration contractors should expect their assignment of benefit contracts to be challenged by insurers in Florida. Those assignments will have to meet the letter of the law to be enforceable. Before long, this will be antiquated law because all assignments will eventually be disallowed based on the recently passed legislation.

Thought For The Day

Lawyers spend a great deal of their time shoveling smoke.

—Oliver Wendell Holmes, Jr.

1 Total Car Restoration v. Citizens Prop. Ins. Corp. , No. 3D22-711, 2023 WL 2505937 (Fla. 3d DCA Mar. 15, 2023) .

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FLORIDA ASSIGNMENT OF BENEFIT ABUSE: RECENT DEVELOPMENTS

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The debate in Florida over a controversial practice known as Assignment of Benefits, otherwise known as “AOB,” has ramped up in recent months as the discussion has made its way to the State’s Legislature and Supreme Court. AOB—the practice of assigning one’s right to receive benefits or make claims under an insurance policy—has long been a part of the health insurance industry, where insureds regularly assign their rights to make claims under health insurance policies to preapproved providers who then bill insurers directly for the cost of providing health care services to the insureds.

In recent years, the practice has expanded beyond health insurance policies and has become commonplace in the homeowners’ insurance space. In a typical homeowners AOB claim, a policyholder assigns his or her right to file a claim under a homeowners’ insurance policy to a third-party restoration contractor who is hired by the homeowner to perform restoration or other repair services to the insured residence. The contractor then files a claim directly with the insurer that issued the policy. Often, the contractor performs the repairs and then files the claim without giving the insurer a meaningful opportunity to assess the loss. Insurers argue these claims lead to unnecessary repairs, inflated repair costs, and increased litigation costs, which, in turn, has resulted in higher insurance premiums for all. Restoration contractors claim that AOBs facilitate speedy repairs and alleviate any need for the insured to be involved in the claims process.

While homeowners’ insurance AOB claims are occurring with greater frequency across the country, Florida has become a hotbed for AOB abuse due to its unique legal landscape, which makes it easier for unscrupulous contractors to game the system and artificially inflate claims costs. There are two key factors that have caused Florida to become ground zero for AOB abuse:

Florida’s one-way attorneys’ fee statute; and
Florida courts have consistently held that the Florida Insurance Code permits insureds to assign their post-loss rights to make claims under insurance policies to third-parties without insurer consent.

Most states permit insureds to assign their rights under a homeowners’ insurance policy after a loss has occurred without first securing the insurers’ consent, which makes it difficult for insurers to assess the true extent of loss that has occurred and keep costs under control. However, Florida stands apart because of its one-way attorneys’ fee statute, which is unique to the State.

In Florida, if an insured or beneficiary prevails against an insurer in a first-party lawsuit, the court may order the insurer to pay the plaintiff’s reasonable attorneys’ fees. The law, however, does not afford those same rights to the insurers. Thus, if the insurer succeeds in defending the lawsuit, the contractor owes the insurer nothing. This one-sided fee shifting scheme, which was intended to even the playing field between insurers and insureds, incentivizes contractors and their attorneys to aggressively file lawsuits against insurers without having to risk the possibility of paying the insurers’ legal costs if they fail.

While the Florida laws described herein apply without regard to the specific kind of loss that has occurred, water loss claims have presented the greatest opportunity for abuse, as they often invoke stressful situations for a homeowner and require quick action to mitigate damages. Moreover, South Florida has seen the greatest increase in litigation as a result of AOB. In 2000, roughly 1,300 AOB lawsuits statewide were reported. By 2013, that number grew to over 79,000, and by the end of 2018, nearly 135,000 lawsuits were filed in the state. That amounts to a 70 percent increase in 5 years. Water loss claims represent 75 percent of all litigation, with the tri-county area of South Florida—Miami-Dade, Broward, and Palm Beach counties—making up 96 percent.

Florida Officials and Insurance Regulators Speak Out

As unnecessary and artificially inflated claims and lawsuits have increased costs for insurers, premium rates have also risen despite loss numbers trending in the opposite direction. Insurers offering homeowners’ insurance in Florida continue to seek the approval of the Florida Office of Insurance Regulation (OIR) to increase premiums, especially for those insured in South Florida. According to OIR, the indicated water loss premium per insured property in South Florida is between $1,300 and $2,000 on average. Compared that to the rest of the state, where the average indicated water loss premiums are between $500 and $700.

The continued rise of premium rates, irrespective of loss trends, resulted in a united call to action by Florida’s state officials and insurance regulators. In his State of the State address, Florida Governor Ron DeSantis called for meaningful AOB legislative reform. Moreover, Insurance Commissioner, David Altmaier, Citizens Property Insurance CEO, Barry Gilway, and Chief Financial Officer, Jimmy Patronis have been active in their advocacy for AOB reform. Through media advisories and presentations before the Florida Legislature, these officials have expressed their support for legislation aimed at combatting AOB abuse. CFO Patronis has also called on the Florida Bar to investigate plaintiff’s firms who are involved in excessive AOB litigation.

Florida Lawmakers Pass Meaningful AOB Reform

During the 2019 legislative session, the Florida legislature passed HB 7065 by Rep. Bob Rommel, with the goal of reducing AOB abuse in the state. The legislation establishes rights and obligations of both the assignees and assignors, and perhaps most important, eliminates the one-way attorney’s fee provision for assignees. Governor DeSantis signed the bill into law on May 23, 2019. It will become effective on July 1, 2019.

The bill requires assignment agreements to be in writing and signed by both the assignee and assignor. Agreements must allow assignors to rescind without penalty within seven days of the execution of the agreement, and the agreement may not impose administrative fees. Assignees must provide a copy of an assignment agreement to an insurer within three business days of the execution of the agreement. Assignees must now provide written estimates of services to be rendered, and indemnify the assignor, to include the waiver of the right to claim a lien against the property by the assignee and any subcontractors of the assignee.

Assignees will now be required to maintain records and provide those records when requested by an insurer. Assignees will also now be required to submit to examinations under oath and alternative dispute resolution (ADR) mechanisms contained in the insurance contract.

Insurers will be entitled to written notice specifying the damages in dispute, the amount claimed, and a pre-suit settlement demand from an assignee at least 10 days prior to the assignee filing suit. An insurer must respond to the pre-suit notice within 10 days of receipt by either making a settlement offer or proposing ADR. The bill discourages forum shopping by allowing a court to award attorney’s fees to an insurer if they voluntarily dismiss an action when an assignee brings an identical claim against the insurer in another court. If the dispute continues to trial, Florida’s one-way attorney’s fee provision for policyholders suing their insurance company no longer applies to an assignee. Attorney’s fees in a suit over a property insurance claim involving an AOB will now be determined by the difference in the amount recovered and the amount offered pre-suit. Fee awards will now be determined as follows:

If the difference between the judgment obtained and the settlement offer is less than 25% of the disputed amount, then the insurer is entitled to attorney’s fees.
If the difference between the judgment obtained and the settlement offer is at least 25% but less than 50% of the disputed amount, neither party is entitled to fees.
If the difference between the judgment obtained and the settlement offer is at least 50% of the disputed amount, the assignee is entitled to attorney’s fees.

Insurers will now be able to make available non-assignable property insurance policies in Florida. This provision has been likened to providing consumers with a choice similar to an HMO and PPO. Non-assignable policies must contain an 18-point font notice that the assignment of the policy is restricted.

Beginning in 2022, insurers will be required to submit claims data to OIR, including but not limited to specific data about claims adjustment, settlement timeframes, and trends, grouped by whether a claim was litigated or not litigated and by loss adjustment expenses. The Financial Services Commission will adopt a rule listing all final required data elements.

Florida Supreme Court Hears AOB Dispute

As Florida lawmakers have been working on a legislative solution to the problem, the Florida Supreme Court has agreed to take up a closely watched AOB case out of St. Lucie County. On December 27, 2018, the Court accepted jurisdiction in the case of Restoration 1 of Port St. Lucie vs. Ark Royal Insurance Company to resolve an apparent conflict between the State’s Fourth and Fifth District Courts of Appeal (DCA). At issue is whether an insurer may restrict insureds’ right to assign post-loss benefits under a homeowners’ insurance policy by requiring that all named insureds and the mortgagee sign an AOB contract before it will be recognized by the insurer. The Fourth DCA answered that question in the affirmative, while the Fifth DCA has held that insurers may not limit insureds’ right to assign post-loss benefits under a homeowners’ insurance policy.

In this case, a husband and wife contracted with a water restoration company to fix water damage to their insured home, the purchase of which had been financed through a mortgage. The wife, without the consent of her husband or the mortgagee, agreed to “an assignment of benefits agreement assigning ‘any and all insurance rights, benefits, proceeds and any cause of action under any applicable insurance policies'” to the water restoration contractor.

The homeowners’ insurance policy at issue contained a provision indicating that “[n]o assignment of claim benefits, regardless of whether made before a loss or after a loss, shall be valid without the written consent of all ‘insureds,’ all additional insureds, and all mortgagee(s) named in the policy.” The Fourth DCA held that this provision was not an impermissible restriction on the right to enter into post-loss AOB contracts and ruled in favor of the insurer.

This will be an important case that will be closely monitored by interested parties.

AOB abuse is a growing problem that seems to be gaining the attention of regulators, lawmakers, courts, and consumers across the nation. While most states must contend with state laws that permit assignment of rights without insurer consent, Florida lawmakers have struggled to address certain factors that have made it the epicenter of AOB abuse in the United States. The state’s one-way attorneys’ fee statute, coupled together with case law holding that insurers do not need to seek insurer consent before entering into AOB contracts with third-party contractors, have created a unique legal landscape that has made it far too easy for dishonest contractors and their attorneys to abuse the system.

As homeowner insurance premium rates skyrocket, interested parties will be watching closely to see how the industry, regulators, and consumers respond to the new AOB reform law. The Florida Supreme Court’s ruling in Restoration 1 of Port St. Lucie vs. Ark Royal Insurance Company may also have a profound impact on the industry. Given the current environment in Florida and the developments in Tallahassee, we could be looking at a new and improved homeowners’ insurance market by the end of 2019, but it is too early to tell. One thing is certain, if AOB reform is not successful in Florida, premium rates will continue to increase, and consumers will continue to suffer.

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Florida CFO Calls for Ban on Assignments of Benefits, Limits on Public Adjusters

In the wake of Hurricane Ian, Florida’s chief financial officer has taken a hard line on insurance claims litigation, calling for an outright ban on assignments-of-benefits agreements.

At a press conference in Cape Coral, a city hit hard by the hurricane this month, and in a statement Wednesday, CFO Jimmy Patronis also urged Florida lawmakers to establish a statewide insurance fraud prosecutor and to disincentivize public adjusters after a storm.

“We have bad public adjusters swarming impacted areas, soliciting, and trying to make a quick buck,” Patronis said. “Not only do individuals need more time to get out of a public adjuster contract during a state of emergency, we need to reduce the percentage a public adjuster is entitled to immediately following a storm, ensuring their motives are aligned with helping Floridians get back on their feet.”

Patronis, whose Department of Financial Services regulates adjusters, did not say what he based the “bad adjusters” assertion on. But some Florida insurers have long complained about public adjusters working closely with contractors and promising homeowners free roofs after a windstorm, leading to exaggerated claims and litigation.

The CFO also did not provide details on his proposed schedule of fees for adjusters.

The call for an end to assignments of benefits, or AOBs, has already met with support from one insurance industry leader.

“We commend the CFO for calling attention to ongoing abuse of assignment-of-benefits tools by shady vendors whose goal is profit above all else,” said Michael Carlson, president of the Personal Insurance Federation of Florida, which represents a number of insurance carriers. “Eliminating post-loss assignments that transfer consumer rights to vendors is a good idea. We also believe that addressing exorbitant public adjuster fees is another good idea and a means to reduce predatory behavior by these licensees.”

Several Florida insurance executives in recent years have called for statutory changes that would allow insurance policies to bar AOB agreements, noting that thousands of lawsuits in recent years have resulted from disputed AOB claims. Data from CaseGlide, a litigation management software firm, shows that as much as 41% of litigated claims against Florida’s largest insurers resulted from assignees of benefits, usually from restoration contractors. In July, the AOB share of new litigations reached an 18-month high, the company said. That came despite 2019 Florida legislation that aimed to reduce AOB suits.

A number of other states allow insurance policies to include non-assignment of benefits clauses.

Carlson said that claims litigation is “the storm after the storm,” and that one-way attorney fees also need to be addressed to disincentivize unnecessary lawsuits.

The Florida Association of Public Adjusters pushed back on Patronis’ agenda.

“We are concerned that the recent release misrepresents the important role and work of licensed public adjusters,” FAPIA President Chris Cury said in a statement Thursday.

Instead of bad actors in the hurricane zone in southwest Florida, “it appears there is a focus on lawful and licensed insurance professionals who are truly working to help policyholders in their time of need.”

Cury noted that, following a declared emergency, adjuster fees already are limited to no more than 10% of any claim made in the first year after the loss.

“Licensed public adjusters, who are regulated by the Department of Financial Services, adhere to strict standards and continue to serve in an essential capacity for the sake of policyholders,” Cury said.

Insurance industry advocates have often blamed the adjusters for advertising heavily after storms and encouraging inflated claims. Insurance agents have reported that homeowners in the Hurricane Ian strike zone have fielded dozens of calls and door-knocks from public adjusters. But some adjusters and claimants’ attorneys have maintained that public adjusters help homeowners achieve a fair payout on claims, while insurance companies sometimes try to minimize the extent of damages.

“The insurance company has adjusters trained to interpret policies and assess a loss but want to preclude an insured from retaining professionals to assist them in doing the same,” said West Palm Beach attorney Gina Clausen Lozier, who has represented policyholders in claims disputes.

She pointed out that many insurance policies require insureds to submit statements within a short timeframe attesting to the amount of losses. Failure to submit can result in denial of the claim. If it’s overstated, insurers have been known to allege fraud. A public adjuster can help provide a timely estimate.

Lozier agreed that Florida’s insurance market is facing a number of problems, but said that licensed adjusters are not to blame.

“The public adjusting industry in Florida is highly regulated, despite ongoing insinuations that public adjusters are operating without legal or ethical restraints by ‘preying’ on insureds,” she said.

Patronis did not call for another special session of the Florida Legislature to adopt his reform ideas, as some industry advocates have done, but referred to “this coming legislative session.” The 2023 regular session begins in March.

Patronis also reiterated his call for a $3 million anti-fraud and public education campaign.

“Policyholders need to understand what they are signing, and that litigation will only slow down their claims and could result in liens on their property,” Patronis said.

Top photo: Workers atop a building that was heavily damaged by Hurricane Ian at Fort Myers Beach. (AP Photo/Jay Reeves)

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Written By William Rabb

Rabb is Southeast Editor for Insurance Journal. He is a long-time newspaper man in the Deep South; also covered workers' comp insurance issues for a trade publication for a few years.

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Florida’s “Assignment of Benefits” Bill: A Guide Through the New Statutory Framework

Florida H.B. 7065 , expected to take effect July 1, 2019, makes several key statutory changes designed to curb AOB practices. We discuss a few of those highlights here.

The bill establishes several new sections of the Florida Statutes, including Fla. Stat. § 627.7152. § 627.7152(2)(a) sets requirements for a proper assignment of benefits:

627.7152 Assignment agreements.—

(2)(a) An assignment agreement must:

1) Be in writing and executed by and between the assignor and the assignee.

2) Contain a provision that allows the assignor to rescind the assignment agreement without a penalty or fee by submitting a written notice of rescission signed by the assignor to the assignee within 14 days after the execution of the agreement, at least 30 days after the date work on the property is scheduled to commence if the assignee has not substantially performed, or at least 30 days after the execution of the agreement if the agreement does not contain a commencement date and the assignee has not begun substantial work on the property.

3) Contain a provision requiring the assignee to provide a copy of the executed assignment agreement to the insurer within 3 business days after the date on which the assignment agreement is executed or the date on which work begins, whichever is earlier. . . .

4) Contain a written, itemized, per-unit cost estimate of the services to be performed by the assignee. . . .

Under § 627.7152(2)(a), contractors will no longer be able to blindside their customers and insurers with exorbitant bills with the expectation that an insurance company will eventually pay it. Now, contractors will be required to provide detailed estimates in advance of performing the work in order to effectively obtain an assignment of insurance benefits. Further, the assignee must promptly notify the insurer of the assignment. Insurers will now be able to monitor costs as they are incurred and ensure contractors are not performing unnecessary repairs.

In the event of litigation, § 627.7152(3) addresses the burden of the assignee:

(3) In a claim arising under an assignment agreement, an assignee has the burden to demonstrate that the insurer is not prejudiced by the assignee’s failure to:

(a) Maintain records of all services provided under the assignment agreement.

(b) Cooperate with the insurer in the claim investigation.

(c) Provide the insurer with requested records and documents related to the services provided, and permit the insurer to make copies of such records and documents.

(d) Deliver a copy of the executed assignment agreement to the insurer within 3 business days after executing the assignment agreement or work has begun, whichever is earlier.

Like a policyholder, assignees must cooperate with the insurer. If an assignee fails to maintain records, provide the insurer requested documents, or deliver the agreement as required by § 627.7152(2)(a), the assignee will bear the burden in litigation of demonstrating a lack of prejudice to the insurer.

In order to even get into a courtroom, however, § 627.7152(9)(a) requires assignees to serve written notice at least 10 business days prior to filing suit. The notice must include, among other things, the amount of damages in dispute, the amount claimed, and a pre-suit settlement demand. The assignee must also provide a detailed written invoice or estimate of services, the number of labor hours, and in the case of work performed, proof that the work has been performed in accordance with “accepted industry standards.” Upon receipt of the notice,

(b) An insurer must respond in writing to the notice within 10 business days after receiving the notice specified in paragraph (a) by making a presuit settlement offer or requiring the assignee to participate in appraisal or other method of alternative dispute resolution under the policy. An insurer must have a procedure for the prompt investigation, review, and evaluation of the dispute stated in the notice and must investigate each claim contained in the notice in accordance with the Florida Insurance Code.

Insurers have an opportunity to avoid litigation through negotiation or appraisal. Assignees are encouraged to make reasonable settlement demands and to consider reasonable offers because failure to do so can trigger an award of attorney’s fees in the insurer’s favor:

(10) Notwithstanding any other provision of law, in a suit related to an assignment agreement for post-loss claims arising under a residential or commercial property insurance policy, attorney fees and costs may be recovered by an assignee only under s. 57.105 and this subsection.

(a) If the difference between the judgment obtained by the assignee and the presuit settlement offer is:

1) Less than 25 percent of the disputed amount, the insurer is entitled to an award of reasonable attorney fees.

2) At least 25 percent but less than 50 percent of the disputed amount, no party is entitled to an award of attorney fees.

3) At least 50 percent of the disputed amount, the assignee is entitled to an award of reasonable attorney fees.

Fla. Stat. § 627.428 is the one way attorney’s fee shifting statute in Florida’s insurance code. This statute generously provides fee-shifting to “prevailing” policyholders and claimants, including following negotiated settlements in contravention of the general American rule. Under the new AOB statute, § 627.7152(10), awards of attorney’s fees are discretionary in suits against insurers by assignees. Further, § 627.7152(10) requires assignees to obtain a judgment of an amount at least 50% greater than the insurer’s pre-suit settlement offer in order to obtain an award of attorney’s fees. For additional encouragement to accept reasonable settlement offers, assignees who fail to obtain a judgment at least 25% greater may be required to pay the insurer’s attorney’s fees.

Last, insurers can avoid “assignment of benefits” issues altogether by prohibiting AOBs in their policies. The bill creates a new § 627.7153, which allows “[a]n insurer may make available a policy that restricts in whole or in part an insured’s right to execute an assignment agreement” if certain conditions are met. Those conditions include that the insurer must also provide unrestricted coverage, the restricted policy is available at a lower cost than the unrestricted policy, policies prohibiting assignment in whole cost less than policies prohibiting assignment in part, and restricted policies must contain notice on its face.

With the passage of this new law, Florida will see a new litigation landscape in the area of assignment of benefits. The law is prospective only, so it will not technically impact existing AOB litigation. However, through passage of this law, Florida has disincentivized unscrupulous contractors and leveled the courtroom playing field and the presently rampant AOB litigation should begin to fade. Ultimately, these changes are expected to benefit Florida policyholders with reduced insurance premiums.

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Assignment of benefits lawsuits stats homeowners need to know

Wed Mar 02 2022

Claims can be stressful, so no one would blame you for trying to find someone else to deal with yours. But while an assignment of benefits (AOB) contract might seem like your ticket to a hassle-free claim process, signing one means you’ve given someone else the right to deal with your insurance company and negotiate your benefits. Unfortunately, that person - usually a contractor or adjuster - may not have your best interests at heart.

Worse? The problems that come with assignment of benefits in Florida like rampant fraud and excessive litigation play a major role in the state’s rising home insurance premiums. Let’s dig into these numbers to see just how big an issue AOBs are in Florida and what homeowners can do to protect themselves.

76% of all lawsuits filed against insurers are in florida

According to the most recent data from the National Association of Insurance Commissioners (NAIC), Florida is responsible for 76 % of lawsuits filed against insurance companies in the United States.

On its own, that’s a staggering statistic. But when you add in that the Sunshine State accounts for just 8 percent of homeowners claims nationwide, you get an idea of just how big a problem assignment of benefits in Florida may be.

$15 billion paid out in claims

The idea that insurance companies have paid $15 billion in claims to Floridians since 2013 may be less shocking now that you know how often insurers are sued. However, only a small percentage of that money makes it to the actual homeowners with damaged roofs and flooded basements. Property Casualty 360 broke down how much everyone gets from these payouts.

Attorney’s fees: 71%
Insurers’ defense costs: 21%
Property owners: 8&

That’s just $1.2 billion of the total claim payout going to the individuals who suffered losses.

33% of new litigation stems from AOB cases

Another sign that assignment of benefits is a problem for Florida homeowners? The number of overall new litigations dropped for insurance companies in 2021, but the percentage of new AOB cases increased, reaching 33% in December . That stat is specific to the month of December, but it represents the highest percentage of a distinct upward trend that began in the first six months of 2021.

A healthy majority of new assignment of benefit cases were in just five Florida counties:

Miami-Dade County : 24%
Broward County : 16%
Palm Beach County : 7%
Orange County : 7%
Hillsborough County : 7%

The amount of new litigation over assignment of benefits in Florida continues to rise despite the state legislature passing a bill to limit AOB abuse through several provisions, including prohibiting certain fees and alterations to policy provisions and transferring particular pre-lawsuit duties to the assignee.

Home insurance costs and assignment of benefits in Florida

The premiums your insurance company collects go towards its expenses, including claims and legal fees if it's sued. When those costs get out of control, your insurer often has to raise premiums to cover them. That’s one reason insurance fraud is such a big deal. Claims paid to con artists make home insurance more expensive for everyone.

Unfortunately, assignment of benefits in Florida appears to be rife with fraudulent claims. Some of these claims were from unethical contractors who charged for unnecessary repairs. But Florida’s one-way attorney fee statute, designed to protect homeowners from exorbitant legal fees, encouraged lawyers to take on unwinnable cases and send the bill to the insurance company.

All in all, the cost of insuring homes in Florida became too great for many insurance companies. And where there are fewer companies competing for business, insurance rates can skyrocket - as evidenced by the 25% increase in Florida this year alone.

Be on the lookout for assignment of benefit scams

The tricky part about AOB scams is that the swindlers claim to have specialized knowledge and then offer to solve what seems like an overwhelming problem for essentially nothing. Who wouldn’t want that? However, that is also a red flag that something is amiss. Other signs of assignment of benefits scams include:

Forms that look unprofessional.
Claims that your damage is worse than it is.
Incentives to sign an AOB, such as rebates and gift cards.
Someone who is pushy about getting your benefits assigned.

Remember that you don’t need to assign away your benefits to get your claim processed. You can manage the claim yourself to ensure that you get what you are entitled to.

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Florida's assignment of beneﬁts crisis

Runaway litigation is spreading, and consumers are paying the price.

DOWNLOAD TO PDF

It is a standard practice throughout the insurance world: As a convenience, a policyholder grants a third party – an auto glass repair company, a medical practitioner, a home contractor – permission to directly bill an insurer to settle a claim. That practice is called an assignment of benefits, usually known by the acronym, AOB.

In Florida, abuse of AOBs has fueled an insurance crisis. The state’s legal environment has encouraged vendors and their attorneys to solicit unwarranted AOBs from tens of thousands of Floridians, conduct unnecessary or unnecessarily expensive work, then file tens of thousands of lawsuits against insurance companies that deny or dispute the claims. This mini-industry has cost consumers billions of dollars as they are forced to pay higher premiums to cover needless repairs and excessive legal fees. And consumers often do not even know that their claims are driving these cost increases.

The abuse therefore acts somewhat like a hidden tax on consumers, helping to increase what are already some of the highest insurance premiums in the country.

This report discusses how AOB abuse works, how and why it is spreading, and how it is contributing to higher insurance costs for Florida consumers.

You May Also Like: Download the accompanying PowerPoint presentation here .

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You can download Adobe Acrobat Reader, free of charge, from the Adobe website ( https://www.adobe.com/products/acrobat/readstep.html ).

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Florida's Assignment of Benefits Law Updated to Better Protect Consumers

By dave bruns , july 03, 2019 11:02 am.

Florida property owners, listen up: The rules have changed on how you can get your home repaired after a hurricane or other natural disaster by letting a contractor deal directly with your insurance company. The legislation, CS/HB 7065, is the biggest change to Florida law on assignment of insurance benefits in years. Whenever Florida is struck by a hurricane or other natural disaster, contractors flock to the area, going door to door and offering to start immediate repairs on homes and businesses if the property owner will sign over their insurance benefits to the contractor. These “assignment of benefits” contracts, also known as AOB, can result in a high-quality repair at a fair price by a licensed, insured contractor. But in recent years, insurers have been pressuring lawmakers to rein in abuses of these AOB contracts, especially lawsuits arising from disputes between contractors and insurers over how much to pay for repairs. In early 2019, Florida insurance regulators testified to the Legislature that that such lawsuits were skyrocketing, driving up insurance costs and threatening to drive some insurers out of the Florida market. Meanwhile, property owners have complained that insurers take too long to inspect property, approve repairs or authorize immediate temporary repairs to prevent future damage. The new law sets new time limits for insurers, property owners and contractors. Here are some of the major provisions of the new law:

If you sign an AOB agreement with a contractor, the contractor (called an “assignee” in the new law) must provide your insurer with an itemized, per-unit cost estimate of the work to be done. The contractor also must provide the insurer a copy of the AOB agreement within three days.
Often, roof damage to a home or business can result in water leaks, which can later turn into major mold and mildew problems. Homeowners sometimes agree to sign over benefits to contractors for a quick temporary repair to head off future loss. The new law limits these temporary repair agreements to $3000 or 1 percent of the coverage limit on such storm damage in your policy, whichever is greater.
If a dispute arises between the insurer and the assignee over how much of the loss will be covered, the assignee has to notify the insurer of intent to file a lawsuit over the dispute at least 10 days before the lawsuit is filed. Insurers have 10 days to respond, but insurers can get extra time if an emergency has been declared in your area because of a storm.
If your contractor sues your insurer to force them to pay more than they’re offering for the repair, and the final judgment in the lawsuit is up to 25 percent more than the insurer’s initial offer, your insurance company now will have the right to collect their attorney’s fees from the assignee. If the final judgment in a lawsuit is between 25 and 50 percent higher than the insurer’s initial offer, neither side can recover attorney’s fees. If the insurer’s initial offer was more than 50 percent lower than the final judgment in a lawsuit, the assignee can recover attorney’s fees from the insurer. This provision was meant to discourage lawsuits in cases where the disputed portion of the insurance settlement is relatively minor. However, if an insurer doesn’t inspect the property or authorize repairs within seven days of notification of a loss, the insurer must give up its right to recover attorney’s fees from a resulting lawsuit.
Previously, Florida courts had held that you had a right to sign over your insurance benefits to a contractor after a loss. Under the new law, insurers now can sell you an insurance policy that doesn’t allow you to assign your benefits to a contractor, although the insurer also must offer you a policy that does allow AOB contracts – possibly at a higher cost.

Read the Legislature’s analysis of the bill’s provisions here.

Received a document?

Florida Court Strictly Enforces New Assignment of Benefits Requirements

Alex Benarroche

472 articles

Florida Insurance Legal alerts Payment Disputes Restoration

Photo of 2 buildings under construction in Florida with Legal Alert Florida label

Restoration and roofing contractors often use an assignment of benefits agreement when performing repairs under an insurance claim. An assignment of benefits (AOB) , in the context of the construction industry, is an agreement that transfers insurance claim rights from the insured to a third-party contractor. This allows the contractor to deal directly with (and get paid by) the insurance provider.

These arrangements have their pros and cons and can often lead to litigation, disputes, and the potential for abuse. Florida has some relatively new laws governing AOBs — and, as a recent restoration contractor learned, they may be strictly enforced by the courts.

Florida’s Assignment of Benefits requirements

In 2019 Florida overhauled their assignment of benefits laws to curb growing concerns of AOB abuse within the state.

“It is no secret that the State of Florida is currently in the midst an insurance crisis, which has resulted in numerous private insurance carriers to stop writing new homeowners policies in Florida, and for same carries, has resulted in bankruptcy or insolvency,” said insurance attorney Jake Huxtable of West Palm Beach, Florida.

“Per the research, a big reason why Florida is in an insurance crisis today is because of the assignment of benefits (“AOB”) abuse and significant influx of AOB lawsuits being filed by contractors against insurance carriers throughout Florida, ever since the passage of Hurricane Irma,” Huxtable said. “There is no dispute that the high volume of AOB litigation in Florida has had a direct, negative impact on not only homeowners insurance carriers, but also on the premiums and taxes that all of us homeowners in Florida are legally required pay in order to own a home and have it insured in Florida, which just continue to skyrocket present day.”

Learn more: Florida Property Insurance Crisis Poses Risk for Restoration Contractors

Given the sharp increase in AOB litigation, the court has strictly enforced these new requirements. Take, for example, a recent case out of a Florida District Court of Appeals.

AOB agreement invalidated for failure to meet strict requirements

The case in question is Kidwell Group, LLC v. United Property & Casualty Insurance .

Project Snapshot

Owner: Ben Kivovitz (Kivovitz)
Represented by: Jake Huxtable of Kelley Kronenberg Attorneys at Law
Represented by: Chad Barr of Chad Barr Law

Kivovitz’s Boynton Beach home was insured by United covering, among other things, direct physical losses to the property. In August of 2017, Kivovitz’s house sustained damage and a claim was submitted to United. Kidwell was brought in to perform the repairs in exchange for an assignment of benefits; allowing Kidwell to directly bill United for the work.

When the work was completed and invoiced, United allegedly failed to make full payment, leaving an unpaid balance of $3,000. Accordingly, Kidwell filed a breach of contract lawsuit against United. This case made it to the 4th District Court of Appeals, which upheld the trial court’s dismissal of Kidwell’s claim due to an insufficient AOB agreement .

The statute governing the requirements for Florida AOBs can be found under Fla. Stat. 627.7152 , and more specifically for the purposes of this case subsection (2)(a) which reads:

“An assignment agreement must: 1. Be in writing and executed by and between the assignor and the assignee… 4. Contain a written, itemized, per-unit cost estimate of the services to be performed by the assignee”

The court began its analysis by stating that the plain language of the statute requires that at the time the AOB is signed, the property owner must be provided with an itemized list of the services to be performed and the costs thereof.

Upon review of the AOB agreement at issue, they affirmed the trial court’s dismissal of Kidwell’s claim:

“While [Kidwell] included the invoice as an attachment to the complaint along with the assignment of benefits, such invoice was unexecuted and dated five days after the assignment was executed… As such, the trial court properly concluded the assignment did not contain a written, itemized, per-unit cost estimate of services to be performed by [Kidwell] as required by sections 627.7152(2)(a)1 and 627.7152(2)(a)4.”

For restoration contractors in Florida, this serves to show that the courts are willing to strictly enforce these provisions and requirements to stifle the rising abuse of AOBs .

Prudent contractors should carefully review these requirements and ensure that their processes are in line with these new laws — specifically when it comes to cost breakdowns. As with every transaction, being upfront and communicating the services and costs clearly and upfront can help to avoid these types of disputes.

Related coverage : Ratings Downgrade Delivers Another Huge Blow to Florida’s Struggling Property Insurance Market

Thoughts from the attorney of record

Mr. Huxtable, the attorney representing United Property Insurance in this case had this to say about the result:

“The research and numbers don’t lie, and it is clear that the Legislature’s intent and purpose in enacting the AOB reform statute, 627.7152, was to put a stop to the AOB abuse by contractors in Florida, in hopes of halting and reducing the outrageously high number of AOB lawsuits that we’ve continuously seen being filed by contractors since 2017.” “Yet, even since the passage and enactment of the new AOB reform statute, there has nonetheless been thousands of AOB lawsuits that these financially-motivated contractors continue to initiate and pursue, without remorse, across the courts in Florida claiming to have standing to sue based upon illegal, non-compliant AOBs that they 100% know do not comport or comply with the new AOB law, but they just don’t care and have continued to pursue their old ways by abusing AOBs and taking advantage of homeowners, to the detriment of everybody in Florida.” ‘But now that we have this new appellate opinion that I was fortunate enough to argue where the 4th DCA upheld the Legislature’s intent in enacting the AOB reform statute, I am hoping that all the other appellate and trial courts in Florida fall in line and enforce the Legislature’s purpose for creating this new law in the first place; that is, to finally curb the AOB abuse and put an end to the insurance crisis in Florida. Kudos to the 4th DCA for making the right decision in this AOB case of first impression, and I am humbled to have been a part of it.”

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AOB Resources

Assignment of benefits, what are the concerns or risks regarding aobs.

AOBs have long been a part of Florida’s insurance marketplace. However, abuses in the way they were being used in the marketplace have driven up costs for homeowners across the state due to unnecessary litigation associated with certain AOB claims.

Consumers should be aware, when signing an AOB, that they may become involved in the third-party vendor’s lawsuit against the insurance company if the third party and company are in dispute on the payment amount of the claim.

What precautionary measures can consumers take prior to signing an AOB?

OIR offers the following tips consumers should consider prior to entering into an AOB contract.

Read your insurance policy carefully.
Know what your responsibilities are after a loss.
Know whether your insurance policy restricts your ability to assign your benefits and the terms of any restrictions.
Know whether your insurer partners with any repair companies.
Contact your insurance company prior to signing the AOB.
Read the AOB carefully, ask questions, and do not feel pressured to sign it.
Do not sign if there are blank spaces contained in the document.

Is a consumer required to sign an AOB to have repairs completed?

No. Consumers can file a claim directly with their insurance company. Filing a claim directly with the insurer allows the consumer to maintain control of the rights and benefits provided by their policy in resolving the claim.

How does a consumer know if they are signing an AOB?

After a loss, a consumer might call a roofer, contractor, plumber, water extraction company, or other third-party vendor to assist with emergency repairs. Once those vendors have assessed the damage, contractors or vendors may present consumers with a document to sign prior to beginning any work.

If the document is an AOB, it will sign over the consumer’s insurance benefits to the contractor or vendor and give this third-party the ability to negotiate and endorse claim payments or file suit against the insurance company on the consumer’s behalf.

An AOB must contain the following paragraph:

YOU ARE AGREEING TO GIVE UP CERTAIN RIGHTS YOU HAVE UNDER YOUR INSURANCE POLICY TO A THIRD PARTY, WHICH MAY RESULT IN LITIGATION AGAINST YOUR INSURER. PLEASE READ AND UNDERSTAND THIS DOCUMENT BEFORE SIGNING IT. YOU HAVE THE RIGHT TO CANCEL THIS AGREEMENT WITHOUT PENALTY WITHIN 14 DAYS AFTER THE DATE THIS AGREEMENT IS EXECUTED, AT LEAST 30 DAYS AFTER THE DATE WORK ON THE PROPERTY IS SCHEDULED TO COMMENCE IF THE ASSIGNEE HAS NOT SUBSTANTIALLY PERFORMED, OR AT LEAST 30 DAYS AFTER THE EXECUTION OF THE AGREEMENT IF THE AGREEMENT DOES NOT CONTAIN A COMMENCEMENT DATE AND THE ASSIGNEE HAS NOT BEGUN SUBSTANTIAL WORK ON THE PROPERTY. HOWEVER, YOU ARE OBLIGATED FOR PAYMENT OF ANY CONTRACTED WORK PERFORMED BEFORE THE AGREEMENT IS RESCINDED. THIS AGREEMENT DOES NOT CHANGE YOUR OBLIGATION TO PERFORM THE DUTIES REQUIRED UNDER YOUR PROPERTY INSURANCE POLICY.

Can the AOB agreement be canceled?

Yes. Following AOB reform in 2019, a consumer can cancel an AOB without any penalties or fees. To cancel, the consumer must give the third-party vendor signed written notice of the desire to cancel the AOB at one of three points during the repair process:

(1) Within 14 days after executing the AOB;

(2) At least 30 days after the date the third-party vendor is scheduled to start work, if that vendor has not already completed a substantial amount of the work; or

(3) At least 30 days after executing the AOB, if the AOB does not have a start date for the work and the third-party vendor has not begun substantial work on the property.

What significant changes came from the 2019 AOB reform?

According to the Department of Financial Services, there were 405 AOB lawsuits across all 67 Florida counties in 2006, and that number had risen to 28,200 by 2016.

To stem the AOB misuse, OIR worked with the Governor, Cabinet, and Florida Legislature to pass significant consumer protection reform related to AOBs. On May 23, 2019, Governor DeSantis signed into law House Bill 7065 (2019) (“HB 7065”), a significant reform to the AOB landscape, effective July 1, 2019.

HB 7065 created section 627.7152 , Florida Statutes, which contains definitions and required provisions for AOBs, referred to as “assignment agreements” in the statute, that are executed under residential or commercial property insurance policies. An AOB that does not comply with this new section is not valid under Florida law.

HB 7065 also created section 627.7153 , Florida Statutes, which provides standards for policies that restrict the right to assign post-loss insurance benefits in whole or in part under a property insurance policy. Insurers offering restricted policies must notify an insured at least annually of the coverage options available for the assignability of benefits and must attach that notice to the premium notice. A restricted policy must be available at a lower cost than a policy that provides the same benefits but does not restrict assignment rights.

Assignment of Benefits Data Calls

In June 2019, OIR issued Informational Memorandum OIR-19-02M to notify insurers that a data call would be issued sooner than required in order to evaluate the preliminary impact of HB 7065. OIR has proactively issued a data call in 2020 to evaluate the preliminary impacts of the legislation.

Previous AOB data call reports are listed below:

2017 Report released on January 12, 2018 – Press Release , Report
2016 Report released on February 8, 2016 - Press Release , Report

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Viewpoint: Florida Begins New Era with Major Property Insurance Reforms

For the fourth time since 2019, the Florida Legislature has enacted property insurance reforms aimed towards stabilizing a beleaguered insurance market. The bill, S.B. 2-A , creates a reinsurance assistance program, establishes additional oversight for insurers with high volumes of hurricane claims, and reforms many aspects of the claims process, including the timing for paying and adjusting claims. The reforms further eliminate one-way attorney fee awards to policyholders and ban assignment-of-benefits agreements. In this article, we will focus on the changes to the claim adjustment process and coverage and bad faith litigation.

In the first round of property insurance reforms in 2019, the Legislature established a pre-suit notice process and two-way attorney’s fee shifting in assignment of benefits (AOB) litigation against admitted carriers. In the second round of property insurance reforms, the Legislature established a procedure requiring pre-suit notice for policyholders. The second round of reforms also set stricter time limitations for giving notice of claims. In the third round of property insurance reforms, the Florida Legislature took a more direct shot at the problem and eliminated statutory attorney fee shifting in suits brought by assignees, created a statutory presumption against attorney’s fee multipliers, and established a requirement that claimants prove a breach of contract in order to prevail on a claim for statutory bad faith against a property insurer. The new fourth round of reforms is discussed in detail below.

No Statutory Attorney’s Fee Shifting in Property Insurance Litigation

The prior reforms attempted to curb frivolous and excessive litigation by establishing a pre-suit notice process and a sliding scale for attorney’s fee awards based on success in the lawsuit. But even with a diminished prospect for an award of attorney’s fees, policyholders still had the leverage of asymmetric litigation. Giving a litigation advantage to one party encourages more litigation.

The Florida Legislature has now eliminated the statutory attorney’s fee shifting in residential and commercial property lawsuits for both admitted and surplus lines carriers, adding the following language to both Sections 627.428 and 626.9373: “In a suit arising under a residential or commercial property insurance policy, there is no right to attorney fees under this section.” The fee-shifting statutes remain in effect for other types of insurance, and there is still potential that policyholders recover attorney’s fees through sanctions motions or proposals for settlement.

Adjustment of Claims

The new reforms reduce the time for insurers to issue undisputed payments. Section 626.9541, unfair methods of competition and unfair or deceptive acts or practices, has been amended to reduce the time for which undisputed payments should be made. Undisputed payments must now be paid within 60 days, down from 90 days, unless payment of the undisputed benefits is prevented by factors beyond the control of the insurer as defined in Section 627.70131(5).

The Florida Legislature also made further amendments to Section 627.70131, which will take effect on March 1, 2023. Changes include:

Reducing the time from 14 calendar days to 7 calendar days for insurers to review and acknowledge receipt of communications, unless payment is made within that time or unless the failure to acknowledge is caused by factors beyond the control of the insurer.
Reducing the time from 14 days to 7 days after the insurer received proof-of-loss statements for the insurer to begin such investigation as is reasonably necessary, unless otherwise provided by the policy or by law, or unless the failure to begin such investigation is caused by factors beyond the control of the insurer.
Reducing the time from 45 days to 30 days after receiving proof-of-loss statements for the insurer to conduct a physical inspection of the property.
Permitting insurers to use electronic methods to investigate losses. Such electronic methods may include any method that provides the insurer with clear, color pictures or video documenting the loss, including, but not limited to, electronic photographs or video recordings of the loss, video conferencing between the adjuster and the policyholder which includes video recording of the loss, and video recordings or photographs of the loss using a drone, driverless vehicle, or other machine that can move independently or through remote control. The insurer also may allow the policyholder to use such methods to assist in the investigation of the loss. An insurer may void the insurance policy if the policyholder or any other person at the direction of the policyholder, with intent to injure, defraud, or deceive any insurer, commits insurance fraud by providing false, incomplete, or misleading information concerning any fact or thing material to a claim using electronic methods. The use of electronic methods to investigate the loss does not prohibit an insurer from assigning a licensed adjuster to physically inspect the property.
Requiring the insurer to send the policyholder a copy of any detailed estimate of loss within 7 days after the estimate is written by the insurer’s adjuster, removing the requirement that the policyholder first request a copy of the estimate.

Section 627.70131(4) has been amended to require insurers to maintain certain records, including dates of:

Any claim-related communication made between the insurer and the policyholder or the policyholder’s representative;
The insurer’s receipt of the policyholder’s proof of loss statement;
Any claim-related request for information made by the insurer to the policyholder or the policyholder’s representative;
Any claim-related inspections of the property made by the insurer, including physical inspections and inspections made by electronic means;
Any detailed estimate of the amount of the loss generated by the insurer’s adjuster;
The beginning and end of any tolling period provided for in subsection (8) of Section 627.70131; and
The insurer’s payment or denial of the claim.

“Factors beyond the control of the insurer” means:

The Office of Insurance Regulation issued an order finding that all or certain residential property insurers are reasonably unable to meet the time requirements of the statute in specified locations and ordering that such insurer or insurers may have additional time as specified by the Office.
Actions by the policyholder or the policyholder’s representative which constitute fraud, lack of cooperation, or intentional misrepresentation regarding the claim for which benefits are owed when such actions reasonably prevent the insurer from complying with any requirement of this section.

This definition of “factors beyond the control of the insurer” is important because it is also used in the section requiring timely payment of claims. The reformed statute now requires coverage determinations within 60 days:

(7)(a) Within 60 days after an insurer receives notice of an initial, reopened, or supplemental property insurance claim from a policyholder, the insurer shall pay or deny such claim or a portion of the claim unless the failure to pay is caused by factors beyond the control of the insurer…. Any payment of an initial or supplemental claim or portion of such claim made 60 days after the insurer receives notice of the claim, or made after the expiration of any additional timeframe provided to pay or deny a claim or a portion of a claim made pursuant to an order of the office finding factors beyond the control of the insurer, whichever is later, bears interest ….

Accordingly, the exception to the interest payment requirement has been limited to instances where the Office of Insurance Regulation determined that there are factors beyond the control of the insurer. An insurer can no longer make that determination. However, the time requirements of Section 627.70131 are tolled if a policyholder or a policyholder’s representative fail to provide material claims information requested by the insurer within 10 days after the request, if the request is made at least 15 days before the insurer is required to pay or deny the claim.

The time requirements are also tolled during any statutory mediation proceeding of any alternative dispute resolution proceeding provided for under the policy.

Deadlines for Notice of Claims

The Florida Legislature has again amended Section 627.70132, which is applicable to both admitted insurers and surplus lines insurers and applies to claims arising from any peril. The amended statute reduces the time to report a claim or reopened claim from 2 years after the date of loss to 1 year. The time to report a supplemental claim is reduced from 3 years after the date of loss to 18 months.

Pre-Suit Notice Process

The parts of Section 627.70152 pertaining to attorney’s fees have been removed. The pre-suit notice and resolution process have otherwise been left intact.

Assignments of Benefits

At the end of 2022, assignments of benefits to service providers will be prohibited:

Except as provided in subsection (11), a policyholder may not assign, in whole or in part, any post-loss insurance benefit under any residential property insurance policy or under any commercial property insurance policy as that term is defined in s. 627.0625(1), issued on or after January 1, 2023. An attempt to assign post-loss property insurance benefits under such a policy is void, invalid, and unenforceable.

This prohibition will apply to admitted carriers only.

Breach of Contract Necessary for Bad Faith

Florida Statutes Section 624.155 permits claimants to file bad faith claims under first-party property insurance policies. Before a claimant can file a bad faith suit, the existence of coverage and the extent of damages, the amount of loss, must be determined. Over the past decade, numerous Florida courts have held that an appraisal award is a sufficient determination of coverage and amount of loss to permit a bad faith suit. Therefore, even if an insurer properly issued payment under the terms of the policy, and had not been found to have breached any part of the policy, it could still face a bad faith suit if an appraisal award resulted in any additional payment to the insured. Consequently, appraisals have become a popular tool for bad faith setups.

The Florida Legislature attempted to fix this issue in its third round of reforms, but the language in the new Section 624.1551 was too vague as to what it means to establish a breach of contract. The Legislature has now replaced Section 624.1551 with more precise conditions for asserting a bad faith claim against a property insurer:

624.1551 Civil remedy actions against property insurers.—

Notwithstanding any provision of s. 624.155 to the contrary, in any claim for extracontractual damages under s. 624.155(1)(b), no action shall lie until a named or omnibus insured or a named beneficiary has established through an adverse adjudication by a court of law that the property insurer breached the insurance contract and a final judgment or decree has been rendered against the insurer. Acceptance of an offer of judgment under s. 768.79 or the payment of an appraisal award does not constitute an adverse adjudication under this section. The difference between an insurer’s appraiser’s final estimate and the appraisal award may be evidence of bad faith under s. 624.155(1)(b), but is not deemed an adverse adjudication under this section and does not, on its own, give rise to a cause of action.

With this amendment, the Legislature has ended the “appraisal to bad faith” setup, and made clear a simple, reasonable proposition—an insurer that has abided by the terms of the insurance policy should not have to defend a bad faith suit.

Offers of Judgment

The Florida Legislature amended Section 768.79, the offer of judgment statute, to permit the making of joint offers that are conditioned on mutual acceptance. This amendment eliminates the “spousal loophole,” which allows spousal co-plaintiffs, and other closely related policyholders, to avoid offers of judgment conditioned on their joint acceptance.

Submission of Claims to Appraisal as a General Business Practice

The bill amends Section 624.418, which provides grounds for the suspension or revocation of an insurer’s certification of authority, to include instances where an insurer, as part of a general business practice, without cause, compels insureds to participate in appraisal in order to secure full payment of their claims. Appraisal is a mechanism for resolving genuine disputes over the amount of loss for a given claim, and the decision to invoke appraisal should be made based upon the facts and circumstances of a particular claim. This amendment to Section 624.418 should alleviate concerns about appraisal being used as a means for avoiding bad faith liability as a result of the breach of contract requirement added to Section 624.1551.

Flood Insurance is Encouraged

The Legislature amended the warning language required in homeowner’s insurance policies that do not provide flood coverage. Instead of advising homeowners that they “may also need to consider” flood coverage, the new disclaimer will advise policyholders that they “should consider” flood coverage.

Mandatory Binding Arbitration Endorsements Authorized

The new law creates Section 627.70154, which codifies that insurers can issue optional mandatory binding arbitration endorsements. The policyholder must sign a form electing binding arbitration, and the premium for the policy must include an actuarially sound discount for the mandatory binding arbitration endorsement. But, insurers must also offer the policyholder a policy that does not require participation in mandatory binding arbitration.

Effective Dates

These statutory reforms became effective upon being signed into law by Governor DeSantis on December 16, 2022, which means the changes apply to policies issued after that time. The amendments to Section 627.70131 take effect on March 1, 2023. Because the old laws will apply to policies that have already been issued, we anticipate a high volume of litigation on older claims, and of claims for damage from Hurricane Ian and Hurricane Nicole. Following the third round of reforms, we saw an uptick of litigation from assignees hoping to litigate under the older, more favorable laws.

Assignments of benefits will be prohibited on January 1, 2023, but this prohibition will likely only apply to admitted carriers.

Closing Thoughts

These reforms represent the most significant changes to Florida’s current Insurance Code since its inception in 1982. In particular, the elimination of attorney’s fee awards has been on the radar of the Office of Insurance Regulation for a number of years now. These insurance reforms benefit both policyholders and insurers. Policyholders will receive quicker claim decisions and payments, and insurers should eventually see fewer abusive lawsuits. The Florida Legislature is encouraging prompt and open adjustment of claims, while discouraging attorneys and contractors from abusing the insurance claim process. We believe these reforms will have a positive impact on the insurance market in Florida, but it will take at least a few years before we see the true impact of this legislation on the volume of property insurance litigation.

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An Update on Assignments of Benefits for Florida Contractors

While assignment of benefit agreements are quickly being phased out for insurance payments on construction projects, it’s important for contractors who plan to continue to use them while they can to know how courts have been applying Florida’s assignment of benefits statute and what contractors need to do to be compliant with those decisions.

Introduction.

Historically, contractors in Florida have been able to use an assignment of benefits to secure their right to payment on a project by having the homeowner assign the right to payment from the insurance carrier directly to the contractor. In July 2019, Florida enacted section 627.7152, Florida Statutes , which set forth specific requirements and limitations for assignment of benefits agreements for construction projects. After the passage of that act, approximately 20 trial court orders were entered along with two appellate decisions were issued, providing guidance on the statute. On May 26, 2022, 627.7152, Florida Statutes , was amended. Following the amendment, approximately 10 more appellate decisions have come down interpreting the statute. Finally, on December 16, 2022, 627.7152, Florida Statutes , was amended a final time, largely doing away with the use of assignment of benefits agreements in Florida for insurance payments on construction projects.

Where We Are Today.

As of the date of this post, under the December 16, 2022 revisions to 627.7152, Florida Statutes , contractors can use an assignment of benefits, and homeowners can enter into an assignment of benefits, if the insurance policy being assigned was issued on or after July 1, 2019 and before January 1, 2023. Based on this language, it appears that a contractor and homeowner could technically enter into an assignment of benefits agreement after January 1, 2023, so long as the relevant insurance policy was issued before January 1, 2023. Further, assignment of benefits agreements entered into prior to December 16, 2022, should be unaffected by the change in statute. You can click here to review my prior analysis of the revisions to 627.7152, Florida Statutes , contained in SB-2A .

Based on this change, there are two important dates that will be relevant to assignment of benefit agreements. First, the date of the assignment of benefits determines whether it must comply with the requirements of 627.7152. See Water Damage Express, LLC v. First Protective Insurance Company and Total Care Restoration LLC v. Citizens Property Insurance Corporation . If the assignment was executed after July 1, 2019, then it must comply with the requirements of the statute. Second, the date of the policy now determines whether the policy is assignable and whether any assignment would be enforceable, regardless of statutory compliance. That date is as set forth above, and must be between July 1, 2019 and January 1, 2023.

If you plan to continue to use assignment of benefit agreements into next year, you should absolutely ask to see the relevant policy and see if your agreement will be enforceable or not based on the date of the policy.

In addition to the most recent changes to the statute, there have been multiple court opinions that have come out providing clarification on what is needed to comply with the statute. These decisions will still be meaningful for as long as there are policies issued between July 1, 2019 and January 1, 2023 still in force. First, it is absolutely critical that assignment of benefits agreement comply with the statute. Under Kidwell Group, LLC v. ASI Preferred Insurance Corp. (decided 11/22/22), an assignment of benefits that is invalid under the statute is void, rather than merely voidable, and an insurance carrier has standing to challenge the validity of the assignment based on failure to comply with the statute.

Further, the assignment agreement must have a written, itemized, per unit cost estimate. While this language comes from the statute, Florida’s courts have interpreted this to require a specific, itemized price list, tailored to the project. For example, in Air Quality Experts Corp. v. Family Security Insurance Company , it was not enough that a standard price list with per room unit prices listed was attached. The court indicated that the estimate needed to include information the number of rooms and what pricing was going to apply to those specific rooms, and a specific total. Similarly, in Kidwell (referenced above), the court determined that an invoice delivered the day after the assignment was signed was not compliant with the itemized estimate requirement of the statute.

Finally, courts also appear to be interpreting the statute broadly. In Kidwell Group, LLC v. American Integrity Insurance Company (decided 9/16/22), the court evaluated an assignment agreement that, on its face stated that that assessment provided under the agreement was not meant to “protect, repair, restore, or replace damaged property or to mitigate against further damage to property.” This language appears to have been intended to attempt to remove the agreement from the statutory definition of an assignment agreement subject to 672.7152. But, the agreement also indicated that the purpose of the agreement was “to determine repairability, scope and/or categorization of water damage, testing for contamination including bacteria and/or mold in order to prepare a forensic engineering report and/or remediation protocol report that may be used to prescribe or confirm proper remediation procedures for the damaged property.” While the court acknowledged the express disclaimer attempting to remove the agreement from the statute, the court concluded that if the agreement, looks like a duck, and quacks like a duck, its a duck. In other words, agreements that seem like assignment agreements, even where they contain language expressly indicating they are not, could be deemed by courts to be assignment agreements.

Court decisions like this make it harder for contractors to determine if their existing agreements are compliant with the statute, or need to be. If you plan to continue to use assignment of benefit agreements for a period of time longer, you need to make sure that you have them reviewed regularly when new court decisions come out, and that you have a plan in place for when there are no more policies applicable that were issued before January 1, 2023.

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Homeowners Insurance Florida – Assignment of Benefits (AOB)

To many homeowners the clauses buried deeply in their insurance policies are overlooked. They contain lots of apparent legal mumbo-jumbo with probably no real impact on one’s coverage until disaster strikes. If you insure property in Florida you may want to study more closely a clause that can cause you severe problems and is greatly responsible for raising your premiums. This clause is Assignment of Benefits, “AOB”.

What is an Assignment of Benefits (AOB)?

From the website of the Florida Insurance Regulator we have an explanation:

An Assignment of Benefits, or an AOB, is a document signed by a policyholder that allows a third party, such as a water extraction company, a roofer, or a plumber, to “stand in the shoes” of the insured and seek direct payment from the insurance company.

AOBs have been a part of Florida’s marketplace for more than a 100 years. Loopholes in the way it is being used in the marketplace are driving up costs for homeowners across the state due to unnecessary litigation associated with certain AOB claims. According to the Department of Financial Services, there were 405 AOB lawsuits across all 67 Florida counties in 2006, and that number had risen to 28,200 by 2016.

What Is The Purpose of Assignment of Benefits?

This clause is designed to appear to relieve the homeowner of the hassles of settling claims after they have been paid what they are owed from a loss. In fact, it is an agreement that, once signed, transfers the insurance claims rights or benefits of the policy to a third party. An AOB gives the third party authority to file a claim, make repair decisions and collect insurance payments without the involvement of the homeowner.

How Does Assignment of Benefits Work?

For example, you as a homeowner have a claim from a storm, say for $10,000 of repairs. An attorney or contractor doing home repairs, approaches you, offers to pay the claim in full and, with your permission, settle with the insurance company. Perfect, you think. You may be presented with a document to sign so that repairs may proceed. It may well contain AOB language. Read it carefully.

The attorney/contractor then sues the insurer for $1,000,000 citing all types of shortcomings, deficiencies and skull duggery in the claim settlement.

Assignment of Benefits Florida Homeowners Insurance

This action is occurring so often in Florida that premiums have been raised and the legislature has been pummeled by insurers and homeowner groups to make changes to the law. To no avail, so far.

At a recent panel discussion put on by Demotech, the question was asked, “What if the legislature was giving a small set of trial lawyers $1 billion a year. And what if you and every one of the six million property homeowners in Florida had to write a $400 check each year to contractors and their lawyers? That’s a different way of looking at this issue. But that’s what’s happened.”

An insurer in Florida, known as the insurer of last resort as it is owned by the state and is intended to insure homeowners who cannot obtain coverage from any other insurer, Citizens Property Insurance Corporation, has declared that it is receiving over 350 claims each month for AOB claims from non-homeowners.

If you want to learn more, you can read our Florida Homeowners Insurance State Guide to find affordable homeowners insurance in Florida.

Florida Assignment of Benefits Legislation

The legislature has been unresponsive, even from efforts within the government. The Office of Insurance Regulation crafted and submitted a bill this year to clarify that only the homeowner claimant would be entitled to file a suit. It, and similar reform measures, failed to pass. This clause appears in many other states also, but Florida is the leader, far and away, in its use by third parties to move you as claimant out of their way to proceed.

What Should You Do In Event of A Claim?

Read your policy. Even if not completely understandable, it will give to you a good start. Contact your insurance company or agent. Don’t sign any AOB with blank spaces. Don’t feel obligated to sign it. Your claim will be satisfactorily adjusted in all likelihood. If you need any homeowners insurance, check our free home insurance quote services .

But be aware: if you sign this agreement and there is a dispute among the other parties with litigation resulting, you may well be brought in to it. If the insurer or the contractor/attorney are not satisfied with monies received you may be seen as responsible for the additional payments and a lien placed upon your property.

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Assignment of Benefits in Florida: The Good, The Bad, And The Ugly

Noble Public Adjusting Group uses our blog to educate and inform Florida policyholders about all things related to your homeowner and commercial property insurance. In that vein, today we would like to discuss an often misunderstood aspect of homeowner insurance called Assignment of Benefits, (AOB.) This is an agreement that, once signed, transfers your homeowner insurance claim benefits to a third party. An AOB gives a Florida third-party authority to file your homeowner insurance claim, make repair decisions and collect insurance payments without your involvement.

As an example, let’s say you have a pipe leak at your Florida home that causes water damage . If you call a Florida restoration company to make repairs and they have you sign an AOB that transfers your insurance rights to them, the restoration company can file your Florida homeowner insurance claim on your behalf and be paid directly without your involvement.

Where the confusion comes in, and why we put in the title, the good, the bad, and the ugly, is that Assignment of Benefits can be a great asset that frees you up from having to worry about your insurance claim getting filed, receiving your insurance payout, or your problem getting fixed. Or signing an AOB could become your worst nightmare, and it all has to do with the Florida contractor or restoration company that you choose. To help Florida policyholders understand this in detail, Noble Public Adjusting Group has broken Assignment of Benefits down to the good, the bad, and the ugly below:

Good Florida contractors who properly use Assignment of Benefits will have everyone on the same page, including the insurance company, the policyholder, and themselves, so there are no surprises. When used appropriately, AOBs can help homeowners get repairs done quickly and avoid the hassle of handling their insurance claim. Noble Public Adjusting Group has a list of vetted contractors in every realm of home repair, whether it be roofing, plumbing, water restoration, or any other type of repairs that need to be made to your Florida home. The contractors or restoration companies that Noble suggests to Florida policyholders who use AOBs do so responsibly and take on all the issues with your Florida homeowner insurance claim and subsequent repairs to your home. One great instance where an AOB can be a lifesaver is when you have an emergency like a broken water line, for instance. The plumber you sign an AOB with can instantly fix the problem and handle the insurance claim in his own time, saving you tons of headaches and possibly more damage that hesitation could cause.

Once you sign an AOB form you have assigned all of your policy benefits over to a Florida contractor or restoration company. If this contractor or supposed restoration specialist is unscrupulous, they may very well make a claim for unnecessary work, heavily pad the pricing of the work, or in some cases even commit fraud. The worst part of this scenario is that after you sign the Assignment of Benefits, you have entered into a binding legal contract and you have set yourself up for a world of trouble and could very well end up in court without your Florida home ever being repaired.

A joint effort of the Florida Chamber of Commerce and U.S. Chamber Institute for Legal Reform has created a one-minute consumer alert warning consumers about Florida trial lawyers and unscrupulous contractors who are scamming millions by abusing Assignment of Benefits. Nearly nonexistent 15 years ago, AOB lawsuit fraud has now spread across Florida, with many homeowners holding the bill on these ‘get rich quick’ schemes from what the Chamber refers to as a cottage industry of trial lawyers and shady repair vendors.

“Florida’s legislature should stop dubious vendors and plaintiffs’ lawyers from raiding the ‘assignment of benefits’ cookie jar. Florida homeowners face skyrocketing insurance costs because of such abuse, and the legislature can provide meaningful relief by adopting sensible reforms,” adds Harold Kim , executive vice president of the U.S. Chamber Institute for Legal Reform.

As you can see after reading the above information, you should be very careful about signing an Assignment of Benefits contract. Your first step when you have damages to your home in Florida should be to call us. Noble Public Adjusting Group keeps an updated list of Florida contractors, such as roofers, plumbers, and water restoration specialist who are vetted by us for their personal integrity and the quality of their work. Some use AOBs, some don’t. You don’t need to be afraid of the AOB, but you DO need to be very wary of Florida contractors you do not know or who have not been vetted by Noble.

We did not come across the name “Noble” by accident. Fighting for policyholders is our life mission and noble cause. Noble Public Adjusting Group’s main office is in Panama City Beach. We have several other offices in Florida, in Texas and in Georgia. Call us today and let’s discuss your insurance claim, AOBs, or any other concern you have. We love hearing from our blog readers!

Noble Public Adjusting Group 107 Amar Place Suite 103 Panama City Beach (West End), FL 32413 (850) 249-MY-PA

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Homeowner’s Academy

This is your guide to interesting facts, tips and general homeowner information. we hope you find the information useful – and feel free to share with friends, how assignment of benefits scams work.

When a home is damaged, the owner calls a repair contractor – for example, a roofer or plumber. The contractor gets the homeowner to sign a broadly worded Assignment of Benefits, or AOB, form, which lets the contractor get paid directly by the insurance company. The problem is, some underhanded contractors inflate the value of their repair job. When the insurance company refuses to pay the bogus amount, the contractor teams up with a lawyer and sues the insurance company.

What Does This Mean for Homeowners?

Everyone who has a Florida homeowners insurance policy pays the price for Assignment of Benefits abuse – including you. For one thing, if you’re a victim of an Assignment of Benefits scam, a lawsuit could be going on regarding your insurance policy – and you may not know anything about it! On top of that, the insurance company has to pay to defend itself … and that drives up the cost of everyone’s insurance.

Assignment of Benefits Prevention Resources

Good news: Assignment of Benefits abuse is preventable. Review the following resources to protect yourself.

Home in Need of a Repair? Beware of Scary Contractors

While most home restoration contractors are reliable, Florida has witnessed a frightening increase in cases related to the scary concept of Assignment of Benefits abuse in recent years… Read More

7 Ways to Avoid Getting Caught in a Home Repair Insurance Scam

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… Read More

The Consumer Protection Coalition has created the following guide to help educate Florida homeowners on Assignment of Benefits fraud and abuse, including:

What is Assignment of Benefits abuse?
What are the risks of signing an AOB?
How can I avoid being an AOB scam victim?

Policyholders: In the Event of a Loss… Call People’s Trust First.

Your People’s Trust Insurance policy makes it easy for you to stop these cheats and do your part to keep everyone’s rates down (including your own). If disaster strikes, Call People’s Trust First at 877.333.1230, and we’ll handle everything from there. No tricks, no schemes.

You get our seamless, hassle-free recovery process – and as always, our work is backed by an industry-leading 3-year, 100% customer satisfaction guarantee. Thanks to your policy with People’s Trust, you can avoid this scam and make sure your repairs are done right. And with our affiliate, the Rapid Response Team , you can avoid the trap of assigning your benefits to shady Florida contractors and losing control of your own home repairs.

Statute of Limitations › Florida › Assignment of Benefits (AOB)

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The Briefing: Nirvana Stuck in Lawsuit Over “Nevermind” Album Cover

Law School Toolbox Podcast Episode 435: Listen and Learn -- Amendments to Pleadings (Civ Pro)

Bar Exam Toolbox Podcast Episode 246: Listen and Learn -- Amendments to Pleadings (Civ Pro)

The Chartwell Chronicles: New Jersey Workers’ Comp Alert

Law School Toolbox Podcast Episode 310: Listen and Learn -- Adverse Possession

Bar Exam Toolbox Podcast Episode 144: Listen and Learn -- Adverse Possession

Podcast: Supreme Court May Resolve Key ERISA Statute of Limitations and Proprietary Fund Litigation Questions

New Jersey Employers Face Tougher Penalties for “Wage Theft” - Employment Law This Week® - Trending News

Common Missteps When Suing the State of New Jersey and How to Prevent Them

Award Protests: Choosing the Forum

FCPA Compliance Report-Episode 346, Mike Skopets on Miller’s Summer 2017 FCPA Report

This Week in FCPA-Episode 56

FCPA Compliance Report-Episode 332 Marc Bohn on the Kokesh Decision

Beginners Guide to Debt Collection Lawsuits by Portfolio Recovery Associates

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Polsinelli Podcast - Avoiding Professional Liability

Bill on Bankruptcy: ResCap Report, a Bargain at $83 Million

Elmo Sex Scandal: More Accusers May Come Forward, Says Lawyer

Legal Fallout of an Armstrong Confession

A Look Inside Florida’s Recent Property Insurance Reform

Two years after implementing meaningful assignment of benefits reform, Florida enacted broader property insurance claim reform. On June 11, 2021, Governor DeSantis sign S.B. 76, which takes effect on July 1, 2021. ... more

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Home Medical Equipment Specialist I - Remote

Rochester, MN

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The HME Specialist I position is the first of multiple career opportunities within the Mayo Clinic Stores. Assists patients with product selection and training of home medical equipment in accordance with provider prescriptions. Gathers registration and insurance information accurately and efficiently, and processes information for payment according to payer requirements. Handles private patient information in a compliant and confidential manner. Assists with maintaining store inventory including inventory cycle counts and perpetual inventory. Performs duties of the job in a manner that is attentive to age and ability considerations of the patient. May provide patients with mobility aides, breast pumps, CPAP machines and supplies, over the counter compression or braces training, ostomy supplies, urology supplies, wound care supplies and oxygen services, or other durable medical equipment or medical supplies depending on store location. May be assigned to working on the medical supply store floor or in a call center environment.

*Candidates must live within a reasonable driving distance of Rochester for on-campus responsibilities.

This position will close on May 10th, at 11:59 pm CST.

High school diploma or equivalent. Prior customer service, sales, healthcare, or patient care experience preferred. Prior DME experience is preferred but not required. Effectively reads, writes, speaks and understand English. Able to learn technical tasks and able to follow written and verbal directions. Comfortable utilizing technology, problem solving and efficient with software applications. Exceptional customer service and communication skills with high level professionalism and ability to have crucial conversations. Proven ability to multi-task and make good decisions regarding customer service. Must be able to work independently as needed. Knowledge of Medicare, Medicaid and/or private insurance billed preferred with attention to detail. Physical and mental stamina to be able to withstand what can often be a fast-paced environment; may be on feet or sitting on feet 90-100% of the time. Must be able to tolerate repetitive hand motion. Must be able to lift up to 50 pounds. Must be current on all applicable annual competencies. For locations requiring driving a company vehicle, must have a valid driver’s license and a clean driving record.

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IMAGES

Assignment Of Benefits
Assignment Of Benefits
Florida Office of Insurance Regulation Publishes 2017 Review of
Understanding Florida Assignment of Benefits
Insurance Assignment Form
Authorization To Bill Health Insurance/Assignment Of Benefits

COMMENTS

Assignment of Benefits (AOB)
Assignment of Benefits (AOB) is an agreement that transfers the insurance claims rights or benefits of the policy to a third party. An AOB gives the third party authority to file a claim, make repair decisions, and collect insurance payments without the involvement of the homeowner. AOBs are commonly used in homeowners' insurance claims by ...
The Current State of Assignment of Benefits Litigation in Florida
By: Senior Counsel Nhan T. Lee with Associate Wayne A. Comstock. On May 25, 2022, Florida lawmakers approved property insurance reforms that remove attorney's fees, with respect to assignment of benefits ("AOB") property insurance litigation. [1] One-way attorney's fees are a longstanding problem in Florida, [2] and the reforms come at a time when AOB litigation increasingly affects ...
Impact of Florida's New Assignment of Benefits Law: HB 7065
Benefits Law: HB 7065. On April 26, 2019, Florida Governor Ron DeSantis signed into law Florida House Bill 7065. The law, which took effect on July 1, 2019, was designed to reduce the amount of assignment of benefits ("AOB") agreements that could be signed between entities and insureds. Governor DeSantis signed H.B. 7065 into law ...
Florida's Property Insurance Reform: The Impact on Carriers and
Assignment of Benefits. The Act eliminates Assignment of Benefits ("AOB") contracts executed under a property insurance policy, effective January 1, 2023. ... The Act has the ability to return ...
Florida Insurance Ruling Sets Precedent on New Assignment-of-Benefits
The state legislature added Florida Statutes Sec. 627.7152, which covered assignment agreements and required contractors to follow new rules to prevent them from taking advantage of homeowners and ...
Assignment of Benefits in Florida Will Soon Be Dead and Are Now
Recent cases demonstrate that such assignment of benefit contracts will be critically examined by courts when insurance companies raise issues about their validity. Last week, a Florida appellate Court ruled that a proposed assignment of benefit contract was void. 1 It noted the insurer's argument and the issue to be determined:
Florida Assignment of Benefit Abuse: Recent Developments
RECENT DEVELOPMENTS. The debate in Florida over a controversial practice known as Assignment of Benefits, otherwise known as "AOB," has ramped up in recent months as the discussion has made its way to the State's Legislature and Supreme Court. AOB—the practice of assigning one's right to receive benefits or make claims under an ...
PDF ASSIGNMENT OF BENEFITS
insurance company from communicating directly with you about your claim. NOTE: AOBs are prohibited for any claims made on property insurance contracts issued or renewed on or after January 1, 2023. JANUARY 2023 CONSUMER TIPS An assignment of beneﬁ ts, if permitted by your insurance contract, can be a useful tool if used properly.
Florida CFO Calls for Ban on Assignments of Benefits, Limits on Public
A number of other states allow insurance policies to include non-assignment of benefits clauses. Carlson said that claims litigation is "the storm after the storm," and that one-way attorney ...
Florida's "Assignment of Benefits" Bill: A Guide Through the New
This rule has incentivized contractors to, via the assignment of benefits mechanism, charge property owners outlandish amounts and to then pursue needless, sometimes frivolous, and always expensive litigation against insurance companies. Florida H.B. 7065, expected to take effect July 1, 2019, makes several key statutory changes designed to ...
Florida Assignment of Benefits Lawsuits by the Numbers
A healthy majority of new assignment of benefit cases were in just five Florida counties: Miami-Dade County: 24%. Broward County: 16%. Palm Beach County: 7%. Orange County: 7%. Hillsborough County: 7%. The amount of new litigation over assignment of benefits in Florida continues to rise despite the state legislature passing a bill to limit AOB ...
Florida's assignment of beneﬁts crisis
That practice is called an assignment of benefits, usually known by the acronym, AOB. In Florida, abuse of AOBs has fueled an insurance crisis. The state's legal environment has encouraged vendors and their attorneys to solicit unwarranted AOBs from tens of thousands of Floridians, conduct unnecessary or unnecessarily expensive work, then ...
Florida's Assignment of Benefits Law Updated to Better Protect Consumers
The legislation, CS/HB 7065, is the biggest change to Florida law on assignment of insurance benefits in years. Whenever Florida is struck by a hurricane or other natural disaster, contractors flock to the area, going door to door and offering to start immediate repairs on homes and businesses if the property owner will sign over their ...
Florida Court Strictly Enforces New Assignment of Benefits ...
Florida's Assignment of Benefits requirements. In 2019 Florida overhauled their assignment of benefits laws to curb growing concerns of AOB abuse within the state. "It is no secret that the State of Florida is currently in the midst an insurance crisis, which has resulted in numerous private insurance carriers to stop writing new homeowners ...
Assignment of Benefits Resources
Assignment of Benefits Data Calls. Section 627.7152 (12), Florida Statutes, provides for the collection of data on residential and commercial property insurance claims paid under AOB. The first data report required under the new statute is due January 30, 2022. In June 2019, OIR issued Informational Memorandum OIR-19-02M to notify insurers that ...
Viewpoint: Florida Begins New Era with Major Property Insurance Reforms
In the first round of property insurance reforms in 2019, the Legislature established a pre-suit notice process and two-way attorney's fee shifting in assignment of benefits (AOB) litigation ...
An Update on Assignments of Benefits for Florida Contractors
In July 2019, Florida enacted section 627.7152, Florida Statutes, which set forth specific requirements and limitations for assignment of benefits agreements for construction projects. After the passage of that act, approximately 20 trial court orders were entered along with two appellate decisions were issued, providing guidance on the statute.
Homeowners Insurance Florida
An Assignment of Benefits, or an AOB, is a document signed by a policyholder that allows a third party, such as a water extraction company, a roofer, or a plumber, to "stand in the shoes" of the insured and seek direct payment from the insurance company. AOBs have been a part of Florida's marketplace for more than a 100 years.
Beware of New Florida Homeowners' Insurance Policies That Restrict
As long as your policy contains a notice about the restriction on assignment of benefits, your insurance company also offers policies with no restrictions, notifies consumers annually of its different options, and charges less for its restricted policies, you have no recourse. ... The Florida Senate. (2019). Insurance assignment agreements ...
Assignment of Benefits in Florida: The Good, The Bad, And The Ugly
To help Florida policyholders understand this in detail, Noble Public Adjusting Group has broken Assignment of Benefits down to the good, the bad, and the ugly below: The Good. Good Florida contractors who properly use Assignment of Benefits will have everyone on the same page, including the insurance company, the policyholder, and themselves ...
How Does Assignment of Benefits Impact Florida Homeowners?
The contractor gets the homeowner to sign a broadly worded Assignment of Benefits, or AOB, form, which lets the contractor get paid directly by the insurance company. The problem is, some underhanded contractors inflate the value of their repair job. When the insurance company refuses to pay the bogus amount, the contractor teams up with a ...
Statute of Limitations › Florida › Assignment of Benefits (AOB)
Two years after implementing meaningful assignment of benefits reform, Florida enacted broader property insurance claim reform. On June 11, 2021, Governor DeSantis sign S.B. 76, which takes effect ...
Insurance Verification Specialist, Remote-FL + 4 other locations
Determine patient's financial responsibilities as stated by insurance; Configure coordination of benefits information on every referral; Ensure assignment of benefits are obtained and on file for Medicare claims; ... Centene first established operations in Florida in 1985. Through Sunshine Health, Centene provides high-quality, affordable ...
Home Medical Equipment Specialist I
Assists patients with product selection and training of home medical equipment in accordance with provider prescriptions. Gathers registration and insurance information accurately and efficiently, and processes information for payment according to payer requirements. Handles private patient information in a compliant and confidential manner.