Lawmakers in Florida approved a plan designed to restructure and lessen the importance of assignment of benefits, a common practice in the state’s insurance industry. The Citizens Property Insurance Corp., which is backed by the state, faces thousands of lawsuits arising from Hurricane Irma claims. As of the end of April 2019, CPIC had 14,091 lawsuits pending against it, which is an increase of almost 14 percent over the 12,363 lawsuits that were pending one year prior.
CPIC had around 420,000 insurance policies in effect as of the end of March 2019, and it had contracted defense work to more than 100 law firms. The insurer said it needs to retain still more defense firms due to new lawsuits from other events.
In the practice of assignment of benefits, a property owner who needs repair work done will sign his or her insurance benefits over to contractors, who then turn to the insurance companies for payment. According to insurers, the practice leaves room for contractors to submit fraudulent claims, and premiums have been driven up by costly litigation. On the other side, plaintiffs’ lawyers and others have said that AOB gives strength to policyholders in negotiations where insurance companies often lowball their clients. The chief of claims for CIPC said it could take some time before the affects of the AOB law on claims for water damage are known.
People who believe they have claims against their insurers might want to schedule a meeting with a lawyer who has experience in insurance law and who might be able to help by examining the relevant policies and providing advice about how to pursue recovery. A lawyer might help draft and file hurricane damage claims, negotiate settlements or advocate before a judge if litigation becomes necessary.