Homeowner Insurance Abuse Needs to Be Addressed
The Florida Senate dropped the ball on an assignment of benefits bill filed to address skyrocketing vendor claims, writes Christian R. Camara, a senior fellow with the R Street Institute in Washington.
June 09, 2017 at 10:00 AM
4 minute read
As Gov. Rick Scott acts on legislation that was passed during the final weeks of this year's regular legislative session, there is one bill noticeably absent from his desk: House Bill 1421. Authored by state Reps. Jamie Grant, R-Tampa, and Rene Plasencia, R-Orlando, the bill would have addressed abuse of assignment of benefits, or AOBs, the driving cause behind the continuing rise of homeowner insurance rates across the state.
It has been over a decade since Floridians were impacted by a major hurricane, so naturally we have legitimate questions about why we continue to pay more every year to insure our properties — a line of questioning further justified by the fact that reinsurance rates are at historic lows and falling.
The principal reason many parts of Florida continue to experience property insurance rate increases rests squarely on the exploitation of laws governing so-called AOB agreements. An AOB permits a policyholder to assign their insurance benefits to a third-party vendor — such as a water remediation company, repair company or contractor — after a loss, allowing the vendor to charge the insurance company for its work directly.
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