In Florida, it is far from uncommon for residents to need repairs to their homes. Whether it be a tropical storm, a hurricane, or any other common cause of damage to Florida homes, our residents rely on their
insurance to come through for them. Unfortunately, the ways in which repairs are carried out are proving to be one of the leading causes of rising insurance costs in the state.

Insurance prices and homeowner costs have reached new heights largely due to unreasonable and unfair Assignment of Benefits (AOB) claims. AOB claims allow the insured to permit outside parties, such as contractors, to request payment from their insurance companies on their behalf, essentially taking multiple steps out of an already complicated process. AOB’s original goal was to streamline the claims process for homeowners and create a better overall customer experience. However, scam contractors are now working alongside some trial attorneys to exploit this once customer-focused system to defraud insurance companies in pursuit of their own gain.

Loopholes in the way AOB documents are being used is presenting incredible harm to consumers. Questionable contractors often make higher claims than the actual damage value to insurance companies, seeking to run away with a profit. In some instances, claims are not even reported to the insurance company until repairs have been completed, precluding any sort of verification of the actual value of damages by an outside party. Implemented in bad faith, this ploy results in huge profits for the contractor, and raised premiums for insurance holders.

AOB claims always increase during hurricane season. After a storm, scam contractors look to claim the right to insurance benefits from consumers eager to simply repair the damage to their home and move on. The insurance industry attempts to prevent AOB scams, but our current system allows contractors to acquire the benefits, file inflated claims and pursue lawsuits against insurers when the claims are rightfully disputed or denied.

Changing the way AOB’s are employed is vital to stopping the insurance abuse currently running rampant in Florida. Without such action, as costs continue to climb for the insurance companies, Florida homeowners can expect to see these increased costs passing down to them in the form of higher premiums.

Anne Cook is a volunteer for Citizens Against Lawsuit Abuse (CALA). The nonpartisan group works to end lawsuit abuse across the United States.