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A new study released by the Insurance Information Institute (I.I.I.) finds that Florida’s assignment of benefits (AOB) crisis has cost consumers billions of dollars in unnecessary litigation and inflated claim costs as the abuse continues to spread statewide.

“In Florida, abuse of AOBs has fueled an insurance crisis,” the report says of the misuse of the policyholder protection known as AOB. “The state’s legal environment has encouraged vendors and their attorneys to solicit unwarranted AOBs from tens of thousands of Floridians, conduct unnecessary or unnecessarily expensive work, then file tens of thousands of lawsuits against insurance companies that deny or dispute the claims.”

The I.I.I. report says the AOB “mini-industry has cost consumers billions of dollars as they are forced to pay higher premiums to cover needless repairs and excessive legal fees.”

An AOB is a document signed by either an auto or homeowners policyholder which allows a third party, such as an auto repair shop or a roofer, to seek direct payment from an insurer on a policyholder’s behalf. In Florida, a policyholder is permitted to sign an AOB document without notifying their insurer or seeking the insurer’s consent. The abuse has stemmed from the third parties with a signed AOB working with plaintiff’s attorney to sue an insurer when the insurer disputes an inflated bill from the third party.

Please enjoy the full article below;

https://www.insurancejournal.com/news/southeast/2018/12/12/511654.htm

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