With just a few weeks before the start of Hurricane Season 2017, all eyes turn to Florida, which had remained relatively unscathed by Mother Nature's torment in recent years until Hurricane Matthew barreled up the Atlantic coastline last September — leaving behind more than $800 million in claims in the Sunshine State.
Yet there is another destructive storm hitting Florida that's causing untold damage. This tempest has been created by unscrupulous contractors, lawyers and their legal tool: Assignment of Benefits. It's one that has inflicted countless painful injuries to not only the insurance industry but also to homeowners as well.
After a storm or an event as simple as a broken water pipe, a policyholder may assign the benefits of the homeowner's policy to a contractor to fix the problem. Of course, some unfortunate policyholders sign over their benefits but they never see the work done even though their insurance company paid the vendor. But it's exploitation of this system by profiteers — certain trial lawyers and contractors — that has led to a torrent of fake and inflated claims, lawsuits and rapidly rising insurance premiums.
|Most AOB claims for water damage
What type of claims are subject to this abuse? Primarily water claims. In December 2014 alone, Citizens Property Insurance Corporation, the state's insurer of last resort, received 562 AOB lawsuits, 513 involving water claims — nearly all of them from Miami-Dade, Broward and Palm Beach counties.
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