Florida’s Assignment of Benefit Agreement (AOB) Reform Explained

An Assignment of Benefit Agreement is a contract that allows property owners to transfer insurance claim rights or policy benefits to a third party, such as a contractor or repairman. This is often done after an emergency so that repairs can be made to your home quickly. For example, if your roof is damaged in a hurricane or storm, you can transfer your insurance rights to a repair company to make repairs. Afterwards, the company will file an insurance claim on your behalf and be reimbursed directly by your insurance company.

However, in recent years contractors have been known to take advantage of this agreement, often charging homeowners outlandish amounts for repairs and then seeking to be reimbursed by insurance companies afterwards. When they are not reimbursed, contractors often file outrageous lawsuits against insurance companies. In order to stem this sort of corruption, the Florida Legislature recently passed an Assignment of Benefits reform bill.

What has changed in the new AOB reform bill?

The new bill addresses the past abuses of post-loss AOB’s for residential and commercial property insurance claims and attempts to stem corruption by contractors. If the reform works as intended, third-party contractors will have less incentive to inflate loss estimates and bring outrageous lawsuits against insurance companies.

Listed below are some key facts about the AOB reform in Florida.

      • Under the new reforms, third party contractors (the “assignee”) will be required to comply with standards that have been approved by the American National Standards Institute.
      • It allows the “assignor” to rescind the AOB without fee or penalty. This must be done by submitting a written notice of rescission within two weeks after the execution of the agreement and at least 30 days after work on the property has been scheduled to begin.
      • It enables insurance companies to prohibit AOB’s in certain cases.
      • It requires assignees to give ten days written notice before filing a suit against an insurance company.
      • It requires contractors to provide detailed estimates to the insurer before beginning work on the property.

The new law will go into effect on July 1, 2019. Policymakers hope that the reform will stop the abuse that has plagued AOB claims in the past. If you have had property damage to your home and are being contacted by third-party contractors who wish to sign an AOB agreement with you, contact an experienced property insurance attorney before making any decisions.

Call a knowledgeable property insurance attorney today

After your property is damaged in a storm or hurricane, it is not always clear what steps to take. Complicated contracts like Assignment of Benefit Agreements can further complicate the matter. At Johnson and Williams, we have years of experience helping clients receive fair compensation to repair damages to their homes. If your property was damaged and you are having difficulty filing a claim with your insurance company, call our office today at (407) 245-1268 to speak with an attorney, or write to us online to schedule a free consultation.