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Florida now has legislation backed by the top Florida insurance regulator and the industry that promises to curtail homeowners insurance abuse under the assignment of benefits (AOB) feature.

Senate Bill 1038, filed Feb. 17 by State Sen. Dorothy Hukill and co-sponsored by Sen. Kathleen Passidomo, seeks to clarify the intent of the assignment of benefits provision for policyholders and limit the scope of benefits provided to those other than the named insured on the policy

The assignment of benefits bill would also instill specified conditions for assignment agreements to be valid. The bill stipulates that an assignment agreement will not be valid unless it meets the following conditions:

  • Agreement is in writing and is executed by all named insureds
  • Allows insureds to rescind the assignment agreement within seven business days without penalty
  • Requires the assignee to provide a copy of the assigned agreement to the insured no later than three business days after the agreement is executed;
  • And includes a written, itemized, per-unit cost estimate of the work to be performed by the assignee.

Other stipulations of the bill include: prohibiting certain provisions in an assignment agreement; specifying requirements for an assignee or transferee; and requiring an assignee to meet certain requirements as a condition precedent to filing suit under a policy.

Under Florida’s current one-way attorney fee statute, policyholders suing their insurer over a claim dispute can recover their attorney’s fees if the insurer is shown to have underpaid the claim, by any amount. The goal of the bill is to keep the assignment of benefits consumer protection in place, but take away the incentive – the one-way attorney fee – that the industry claims is driving abuse by assignees, who have included unregulated water mitigation, remediation and roofing contractors typically working with attorney groups.

If passed by the Legislature and signed into law, the bill would become effective July 1, 2017

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