One topic that’s been in the news, but lost under all the political noise, is something called “Assignment of Benefits”. This allows the insurer to directly pay a third party such as a contractor for work done to repair a home. A recent bill is ready to hit the Senate floor up in Tallahassee soon, and it’s already being assailed from both sides for not doing enough or for doing too much. Florida insurance companies, consumer advocates, and regulators wanted a bill that capped referral fees at $25 and limited emergency repairs to $2,500 prior to inspection by an insurance company. Lobbyists for roofers, contractors, and other restoration workers very notably did not.

The problem with AOB is not assigning benefits to a third party; the problem is the growing rackets and scams that are preying on Florida citizens and driving up insurance rates. The problem was specifically called out by Citizen’s CEO Barry Gilway who singled out water damage claims as the reason for the company’s recent rate hikes. Water damage claims are skyrocketing, and so are “free roof” scams that offer to replace your “damaged” roof on your insurance company’s dime.

Many homeowners do not understand what they’re signing off on, or just don’t have cash on hand to make repairs up front. Sometimes a house is genuinely damaged enough to be uninhabitable, and the owners don’t have coverage for loss of use. It’s understandable; they just want their house fixed, the roof fixed, or the water extracted and dried out before mold and further damage can set in. The problem is that it’s actually not that simple.

When you sign an AOB, the contractor – not the homeowner – becomes the sole person allowed to make ALL the insurance decisions for the home. This opens the door for the contractor to bill for work never done or repairs never needed, and the insurance company pays. Why? Because it’s easier to just pay the claim alone than it is to pay the claim, plus feeds for their lawyers and the plaintiff’s lawyers, too. It wasn’t supposed to be like this. The AOB was originally intended to be a way for homeowners in distress to get repairs and work done faster and let the insurance companies pay claims with less hassle. Honestly, we can’t say that it was wrong to do it, but scammers and hustlers will always find a way to ruin any good thing – and they are.

Talking to your insurance agent should be the first thing you do, and never sign anything unless you’ve read it and fully understood it. Scammers count on you being off balance and upset, because that’s when it’s easiest to get you. Let us help you scam-proof your homeownership experience by teaching you everything you need to know about your homeowner’s coverage, and how to craft coverage with an independent agent that will never leave you high and dry. We’re Pallant, we’re independent, and we’ve been helping SoFlo homeowners get through the bad times for fifteen years. We can help you, too.