Looking at the Florida economy, you think everything looks sunshiny in the Sunshine State. However there are problems lurking in our economy that are going unaddressed. One of them is about to put a dent in your wallet. We have written previously about Assignment of Benefits and the abuses that bad actors are using to bilk the system and enrich themselves by means of fraud. Ironically, Assignment of Benefits was supposed to streamline homeowners’ insurance claims, . Instead, it has become a drag on the economy, and hiked premiums sky high.
More Than Bad Apples
A number of people would like to argue that a small number of bad apples have given Assignment of Benefits a bad name. People might be willing to tolerate a small level of fraud, but when the fraud grows large enough to cause Citizens Insurance to hike rates on 84 percent of their policyholders, it is something more than bad apples. It is a culture of fraud that is robbing the state of dollars that would otherwise be spent on the state’s economy. The insurance companies are being sued by the companies taking advantage of AOB, and would rather pay the fraudsters then fight the cases in court. The fraudsters know this, and that . They are content to take their settlement and leave, then go on to the next flooded or wind damaged homeowner and repeat the process.
Changes That Would Help
in order to return AOB to the drafters’ intended purpose. Some of the key provisions in the new draft will stop courts from awarding attorney’s fees in these types of lawsuits, which are used by a small minority of attorneys and law firms to enrich themselves at Florida homeowners’ expense. The legislation will also allow a buyer’s escape clause, which will give homeowners a chance to back out of agreements in a certain period of time. This would cut down on inflated claims, and the cost of litigating these claims in court. If no action is taken, then Citizens Insurance policyholders could see their rates double in the next five years, increasing by as much as 10 percent per year.
Taking a Stand
It is time for the Citizens of Florida to take a stand with their representatives and advocate loudly and repeatedly for action. At the moment, this bill has been referred to the usual committees, without much action. To put it bluntly, awarding attorney’s fees when suing an insurance company was never intended to benefit contractors and their attorneys. This provision was intended to prevent further losses for the insured if they had to litigate a claim against their insurance company. Closing this loophole will allow insurance premiums to go down, and for the law to be used as was intended – to get homeowners back in their homes as quickly as possible after a claim.