The Story of AOB and Why You Should Fear It's End
A storm is coming. You do all you can to prepare. Yet in the middle of the night, wind howling, rain beating incessantly against your walls, disaster strikes. Rooms soaked, roof shattered and your life turned upside down.
But you think, thank God I have insurance. You call a water damage company and a roofer knowing that you need to do all you can to mitigate the damage and wait for your insurer to ride in on a white horse and be the service you paid for. You trust that the services rendered in the interim will be paid for by insurance, you sign the invoice and those who do the work remind you that you owe nothing and they'll handle everything with your insurer.
Peace of mind. A safe home. And a system that works.
But, if big insurance lobbyists get their way this session in Tallahassee, that peace of mind will be gone. If big insurance lobbyists get their way, you'll be at the mercy of the insurance company's adjuster, who often shows up days or weeks after the emergency repair work has already been completed.
The Florida Legislature is being asked to force Floridians to trust insurance companies to want to pay your claims and treat you fairly. Yes, you read that right. Big insurance lobbyists want you to trust your insurance company to cover you after their bill passes that explicitly gives them the right to arbitrarily decide if they will honor the work, and the quality, of the repairs to your home.
That's right. Every time you go to the doctor, dentist, or chiropractor, you utilize an AOB. A process that is simple, easy, and effective. A process that you know keeps your focus on better health and the doctor's billing department focused on dealing with your insurance company. Similarly, this process, in homeowners' insurance, has worked well in Florida for almost 100 years.
But, the bill working its way through Tallahassee, glistening off of the cufflinks of lobbyists from Big Insurance, will force homeowners to pay out of pocket for repairs because contractors/vendors will not be willing to do the work without some hope of being able to secure payment after the job is done. What the bills also don't decide is what happens if the insurance carrier only wants to pay half or even denies the claim outright. The bill even prevents the contractor/vendor from suing the insurance company to recover the repair costs and denies you, the property owner, the ability to empower the contractor/vendor.
So in the end, homes go unfixed or homeowners "go cheap" and now get preyed upon by unlicensed contractors willing to do the work for a much cheaper price. Additionally, those contractors/vendors willing to do the work basically out of moral responsibility and nothing else, will be forced to place a construction lien on your home
All horrible options for Floridians.
So the next time you hear thunder in the distance, remember, that may be a storm or it may be the sound of your insurer cheering their gift from Tallahassee. I would hope all roofers, plumbers, contractors, doctors, dentists, and homeowners everywhere would call and write their legislators before it's too late. After all, when did Noah build the Ark? Before the rain.
Frequently Asked Questions
Why Does Big Insurance Want It?
Insurance companies and their adjusters like to control the claim. When they can hire their own adjusters and engineers they maintain the upper hand against their own insureds - us homeowners. Right now, the law allows us to let our chosen contractor, roofer, water/fire mitigation company to enforce payment of their bill. This places the two professionals on a more even playing field - something the insurance carriers don't like. So they're trying to prevent us from exercising our right to do with the claim as we choose. Insurers would rather maintain their knowledge and experience advantage over the homeowner to save themselves money.
How Did Bills Like This Get This Far?
Like previous "crisis" claims, big insurance and their war-chest backed lobbyists simply cry wolf ("crisis/fraud"). This is despite not one single water mitigation company or employee being arrested since this alleged "crisis" started. Big insurance has never supported the claims they repeat over and over again. Unchecked, the myth somehow became reality. Stand up against these injustices and lies.
Is AOB something new and invented by lawyers just to make money?
NO. AOB's have been used for over 100 years across multiple industries and occupations. They are the foundation of health insurance and as a matter of fact, when one Googles "Assignment of Benefits" the first thing to appear is - "Assignment of benefits (definition): An arrangement by which a patient requests that their health benefit payments be made directly to a designated person or facility, such as a physician or hospital."
Who is Behind the Push to End AOBs?
The Insurance Industry. Big insurance and their army of lobbyists argue that contractors and repair men and women are "abusing the system" and making them pay for more than what they owe their policyholders. Now they are asking the Florida Legislature to let them decide what is and is not a neccesary repair with the homeowner ultimately liable for any repair or lack thereof.
Is Florida alone or virtually Alone in Allowing AOBs?
No. This legislation would take Florida out of the vast majority of States who not only allow the right to assign the benefits of a contract but also affirmatively protect the right to assign benefits
Will This Bill Just Impact Property Insurance?
No. The language of each bill is broad enough to prevent the assignment of benefits in many cases including health insurance cases, etc.
Won't This Bill Reduce Lawsuits?
For Insurance Companies - possibly. But instead of promoting settlements and protecting policyholders, these bills will allow insurance companies to gamble at the policyholder’s expense with much less fear of litigation.
Won't This Bill Promote Job Growth?
NO. It will devastate builders, roofers, contractors and other blue collar workers who won't do such expensive and intricate work without some guarantee they will be paid.