Florida’s AOB problem

Assignment of Benefits (AOB) may seem like a convenient method for home and car owners in need of prompt repairs. Signing an AOB can supposedly expedite a literal “quick fix” by turning over all rights to an insurance claim to contractors or attorneys.

Yet, the devil is in the details when it comes to the fine print.

In reality, many professionals with signed AOBs use them to inflate claims to profit from them. For example, windshields normally cost up to $600, yet glass replacement companies are pursuing hundreds of claims of well over $10,000. Countless roof damage claims are submitted at twice the normal value.

Once filed, the threat of lawsuits soon follows with contractors and attorneys knowing that insurers prefer to save the time and money in avoiding a courtroom battle.

In response to the growing problem, Florida lawmakers are considering two measures focused on AOB reform. The legislation would tighten requirements for contractors to report claims to insurance companies. It would also create a graduated scale to determine qualifications by contractors holding these agreements to recover litigation expenses from carriers.

Additionally, the Office of Insurance Regulations would be responsible for monitoring progress by collecting data on trends in AOBs and any related litigation.

The Florida House overwhelmingly passed the AOB reform bill on a vote of 91-26.

Allowed to continue, the damage caused by AOB abuse could be widespread. Consumers could see their home and car insurance rates in Florida increase significantly, many by hundreds of dollars annually.

Conversely, ethical contractors and legal professionals may find themselves forced to fight an uphill battle and overcome the harm done by peers who engage in unethical AOB abuse.