Lobbyists for the insurance companies have been working hard. Unfortunately, their efforts recently paid off. In response to their extended efforts to push a new Assignment of Benefits (AOB) bill through, Gov. Desantis signed a bill that will go into effect today, July 1st, and will allow insurance companies to offer policies that restrict—or deny entirely—your right to assign your insurance benefits to a contractor so he or she can begin repairs immediately.
How the New AOB Bill Might Impair Your Ability to Repair
If your home suffers damage that is covered under an insurance policy, contractors will often begin repairs immediately under what is called an Assignment of Benefits. The contractor basically steps into your shoes as the policyholder and has the same rights as you to recover from the insurance company. Assignments of Benefits are beneficial to you because they prevent you from having to pay upfront for the repairs or deal with the insurance company on the claim. They are also beneficial to the contractor because it is a guarantee of payment for work performed.
Insurance companies, on the other hand, do not like Assignments of Benefits because they allow the contractor to determine the cost of repair, not the insurance company, and they take away the insurance company's ability to delay, underpay, or deny your claim as part of their own (often protracted) “investigation” of the claim.
The Current Debate on Enforceability of AOB Restrictions
As we previously reported here, there is currently a debate among the Florida District Courts as to what is required for a valid and binding Assignment of Benefits. While the Florida 5th DCA rejected an argument by the insurance company that an AOB post-loss is only enforceable if it is signed by the mortgagor (your mortgage-holder, the bank, which is very hard to obtain), the Florida 4th DCA found this requirement was enforceable. While the Florida Supreme Court will soon take this debate up and weigh in on the issue, the new AOB law will trump unless the matter is brought back to the court asking whether the new law is unconstitutional.
Questions About Your Right to Assign Benefits?
If you have questions about your insurance policy, your coverage, or your ability to assign benefits under your policy, never hesitate to contact us for a free coverage review. We never charge any fee or cost to simply review your policy and answer your questions. It is much better to know what coverage you actually have and how your policy works before damage occurs and you have to file a claim. Contact us anytime at (850) 438-4899 or [email protected].