Some analysts say that Florida homeowners are facing unprecedented homeowners' insurance premiums, but the growth in fees cannot be attributed to hurricanes, floods and other natural disasters. Instead, analysts claim that provisions in the state's insurance laws allow contractors to exploit the system to obtain high payments at the expense of insurance companies and, eventually, homeowners. State law allows for Assignment of Benefits, or AOB, under which homeowners can assign the right to their benefits to a third party.
In most cases, that third party is a roofer or other home repair contractor who has been engaged to repair a damaged home. The contractor will perform the work before the homeowner has received an insurance payment; instead, the contractor will go after the insurance company itself for the benefits involved. The number of lawsuits related to AOB has escalated dramatically in Florida in the past 10 years. In 2007, there were 4,986 lawsuits related to AOB issues. However, by 2017, that number reached 129,781 cases annually, and AOB lawsuits made up 60 percent of all insurance litigation statewide.
State law requires that when a policyholder sues an insurance company and wins, the company is responsible for paying both parties' legal fees. This policy attempts to rectify the large gulf in capacity between homeowners and insurers. In the case of AOB issues, insurers may settle with contractors for higher sums than they otherwise would in order to avoid substantial legal fees.
Insurance companies may attempt to make up for the large amounts paid to contractors by denying legitimate claims from homeowners or subjecting them to excessive scrutiny. Homeowners who file hurricane damage claims may find themselves waiting to be reimbursed in order to move forward with important renovations. An insurance lawyer may be able to help Florida homeowners protect their rights and seek the benefits they deserve.