Assignment of Benefits
Even though nearly a decade has passed since a hurricane affected Florida insurance rates, the state is experiencing a huge increase in claims from water extraction firms, roofers and other contractors who are abusing the “Assignment of Benefits” clause to inflate their profits. What exactly does that mean? Imagine you woke up to a broken pipe and water damage, so you called the first water mitigation company that was available. They reassure you they will handle everything-just sign these papers. Somewhere in that contract may be an Assignment of benefits clause in words similar to “I transfer and assign any and all insurance rights, benefits, and causes of action under my property insurance policy.” Most people will either not read the contract or fail to understand what it means.
What you don’t know could hurt you.
You have just signed away control of your insurance claim to potentially untrustworthy third parties who are free to inflate the cost of the work. You no longer have a say. In fact, you no longer have the right to even inquire about your own insurance claim, but it doesn’t stop there. You could be sued or face a lien on your own home for the difference between what your insurer legitimately owes the contractor and the exaggerated charges. Scenarios like this are creating nightmares for Florida homeowners every day.
The legalization for AOB forms was to allow contractors to receive payment for work performed directly from the insurance company, saving the homeowner from up-front payments. The actual outcome of this practice has become devastating. The abuse of Assignment of benefits has been catching so much traction that Florida State Representative David Santiago wrote a blistering article in the Tampa Tribune on January 23, 2015 entitled “Home repair insurance claim fraud hammering Florida.” Other Representatives are working hard to end the legalization of AOB in Florida, but it is an uphill battle.
Protecting your rights
Contacting your carrier in these situations is key to protecting yourself and your home. Rothrock and Associates is here to help. Contact us if with any questions you may have about how to protect yourself against AOB abuse.
Article courtesy of Olympus Insurance
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