An article authored by shareholder Susan C. Odess was featured as the “Board of Contributors” guest commentary column in today’s edition of the Daily Business Review, South Florida’s exclusive business daily and official court newspaper. The article, which is titled “Florida Legislature Passes Assignment of Benefits Insurance Claim Reform,” discusses the ramifications of the new state law to reform the insurance industry practice known as assignment of benefits, or AOB. Her article reads:
. . . The AOB process, which has been in place for decades, has become controversial in recent years because of an increase in residential water-damage claims, primarily for broken water pipes and leaks. Property owners sign over their claim benefits to contractors, which are then able to pursue payments directly from the insurers.
The proponents of AOBs say they help to ensure claims are properly paid, but the legislators supporting the bill have said it is aimed at curbing abuses of the AOB process. Insurance carriers have contended for many years that AOB fraud and the excessive litigation it generates have led to higher property-insurance rates.
The new law limits attorney fees in AOB lawsuits filed by contractors against insurers. The legal fees will be calculated using a set formula, but the caps would not apply to lawsuits filed by policyholders.