Restoration Association of Florida sues to block law targeting contractors

by | May 31, 2022


The Restoration Association of Florida (RAF) on Tuesday filed a lawsuit in a Leon County Circuit Court claiming that a new law approved by the Florida Legislature last week unconstitutionally singles out home repair contractors rather than targeting the rudimentary catalysts causing Florida’s homeowner’s insurance crisis.

The law, SB 2-D, allegedly isolates contractors by stripping them of legal rights in cases of repair work involving assignments of benefits (AOBs).

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.

The law prevents contractors who hold AOBs from recovering their attorneys’ fees if they prevail against insurance companies.

Homeowners and insurers keep their right to recover prevailing party fees, and the new law denies those rights only to contractors violates the equal protection clause of the Florida Constitution, the lawsuit says.

“Most of the claims that contractors submit to insurers under AOBs are for relatively small amounts of money. But when the insurers delay, underpay, or deny payment for valid claims, these businesses have little choice besides taking them to court,” said RAF President Richie Kidwell, whose organization filed the lawsuit to block the new law. “By denying contractors the right to recover reasonable attorney fees, the new law makes it economically unfeasible for contractors to pursue legal remedies in court and gives insurers even more incentive stall payments.”

The lawsuit asks the court to declare that the new law violates the Florida Constitution and issue an injunction blocking the law so contractors can “continue to engage in their licensed professions and businesses with the assurance “their constitutional rights will not be violated.”

“Rather than address factors within the property insurance industry that have led to its problematic volatility, the Florida Legislature chose to violate the constitutional rights of contractors – the individuals and businesses that repair the homes and commercial buildings owned by Floridians damaged by extreme weather events such as hurricanes,” the Complaint states.

In a separate action,  RAF also asserts that Florida Insurance Commissioner David Altmaier, along with two insurance agencies and Florida’s Office of Insurance Regulation (OIR) improperly allowed the companies to circumvent state law in order to change customers’ policies, violating state law and the Florida Constitution.

The Restoration Association of Florida (RAF) argues that Altmaier violated public policy established by the Legislature when he allowed American Integrity Insurance Company of Florida and Heritage Property & Casualty Insurance Company to change consumers’ insurance policies.

“It is not a secret that property damage insurance claims are prevalent in Florida due to the occurrence of hurricanes, floods, and other storm-related events. Homeowners rely on their insurance companies and the policies purchased as life preservers after problems occur,” the complaint against Altmaier reads.”Yet, the goal of the Insurance Company Defendants here is to mount as many barriers as possible to homeowners receiving the proceeds of their policies for lawful claims, while at the same time, reaping the benefits of policy premiums paid by Floridians.”

Those changes restricted homeowners’ rights regarding repair work and violated Florida’s Homeowner Claims Bill of Rights, the lawsuit says.


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