Assignment of Benefits in Florida – The Beat Goes On
It looks like the Florida Legislature has taken the first steps in properly addressing the Assignment of Benefits (AOB) issue that is creating insurance claim and other problems. For first time readers, AOB is when a policyholder assigns their claim benefits over to a contractor.
There was a great blog today on Assignment of Benefits by Scott Johnson and here is my response to the author and possibly some ideas to address the issue fairly.
Great blog today! I had no idea of the extent of the AOB problem in terms of numbers all be it dollars, lawsuits etc. I can appreciate the emergency services folks needing some type of protection as in this day and age not all the carriers out there are staffed with field staff (due to cost) to meet on-site and get an agreed to scope and price of the loss. In a perfect world, a direction to pay form signed by the insured, the adjuster and the emergency services rep on what needs to be done and at what price at the time of the loss, would likely eliminate most of the AOB problems. If hidden or other unknown claim issues come up that weren’t known at the initial inspection there is always the supplemental claim route. Insurance companies hate supplements, but based on your blog numbers my guess is they are even more adverse to the AOB crisis.
In the current environment, it appears the AOB has turned into a new profit center for lawyers. If the legislature has the backbone to take attorney fees out of the mix, the problem will be fixed, end of story! Alternatively, a policy provision such as a dispute resolution form, like appraisal, may work to keep attorneys out but at the same time allow parties with real difference to air them out in a binding process. Clearly this has to be fixed.
As aside, I watched the video of the panel on your blog discussing the AOB problem at the recent Florida Chamber of Commerce event. I thought it was well done and not surprisingly, I learned a few new things. The Windstorm Insurance Network Annual Conference in New Orleans last month had two workshops on AOB. The session I attended was one of the highest attended workshops at the conference. The class had a plaintiff’s lawyer, a defense lawyer and a carrier adjuster. While there were a few contractors in favor of AOB, the class was presented in an educational format about what AOB is and some of the controversy surrounding it. I was really surprised (given the class size and diversity of the attendees) that it was not more controversial. Maybe this is a Florida issue and folks at the conference were from a number of other states.
Finally if you or other folks are ever in need of a public adjuster panel member to provide another prospective, let me know as I enjoy it.
Let us know how you think the AOB issue should be addressed or what other issues it may create. I’m sure insurance departments in other states are monitoring this closely. I’m heading up to New York and the Boston area to help clients with snow and ice damage claims. Are insurance claims handled differently up north? We’ll let you know what we find.