The Florida Senate Banking and Insurance Committee advanced a proposal yesterday that would rein in the assignment of benefits (AOB) practice in the state, News4Jax reports.
AOB is a practice in which contractors convince consumers looking for home improvement work to sign over insurance benefits directly to the contractor, which includes the ability to sue the insurance company over contracted fees. Due to the one way attorney fee statute, the contractors have partnered with plaintiffs’ attorneys to sue insurance companies, which has increased lawsuit filings and insurance rates in the state. The Committee voted 5-3 on a bill that would restrict the circumstances in which assignment of benefits can be used and revamp the way attorneys’ fees are calculated in these cases.
The practice has been blamed for the rising home insurance costs in the state. The number of assignment of benefits-related lawsuits increased from 1,300 in 2000 to 135,000 in 2018. During that time, Floridians paid an extra $1.6 billion for insurance over the past ten years than consumers in other states.