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AOB Reform: Bob Rommel Gets It Done in the House

April 12, 2019 - 9:00am
Bob Rommel
Bob Rommel

With the sponsor saying the bill targets “bad actors,” the House on Thursday passed a controversial bill that would revamp the insurance practice known as assignment of benefits.

The 96-20 vote came on an issue that the insurance industry and business groups have made a top priority as they contend changes are needed to hold down insurance premiums. But the House and Senate have not been able to agree on the issue in past years and still need to reach a compromise before the annual legislative session ends May 3.

House Speaker Jose Oliva, R-Miami Lakes, told reporters after the vote that assignment of benefits is “part of a negotiation” between the House and the Senate, but he added “we feel strongly that we have a good bill.”

Known almost universally in the Capitol as AOB, assignment of benefits is a decades-old practice in which policyholders sign over claims to contractors, who then pursue payment from insurance companies for work. The controversy emerged largely because of residential water-damage claims, with insurers arguing that AOB has become riddled with fraud and litigation --- driving up premiums.

But plaintiffs’ attorneys and many home-repair firms have objected to legislative attempts to revamp the process, contending that the proposals would tilt the system too far toward the insurance industry. They argue that assignment of benefits helps ensure claims are paid properly.

The House bill (HB 7065), sponsored by Civil Justice Chairman Bob Rommel, R-Naples, would make a series of changes, including restricting attorney fees in AOB cases and allowing insurers to sell policies that would not be subject to assignment of benefits. Rommel has repeatedly argued in committees and on the House floor that he is trying to address “bad actors” and that homeowners should be able to choose potentially lower-cost policies that do not allow assignment of benefits.

“This bill allows the consumers to make the choice that’s best for them, period,” he said Thursday. “This bill stops the abuse that is going on.”

State Insurance Commissioner David Altmaier issued a statement that praised the House for passing the bill and focused on the attempt to limit attorney fees. Altmaier said Florida’s current attorney-fee system “incentivizes abusive litigation in our insurance market. As a result, Florida remains unique as we are one of the only states currently battling a cottage industry that profits off the systemic abuse of AOBs.”

But the Restoration Association of Florida, a group that has fought the bill, issued a statement saying the House’s decision “to pass dangerous AOB reforms will have negative implications for homeowners and small businesses throughout the state.”

“We call on Florida’s legislative leaders to do the right thing and support measures that protect their constituents, and not the insurance industry, who already have a significant advantage over homeowners and small businesses,” Amanda Prater, a spokeswoman for the group, said in the statement.

Critics of the House and Senate bills have repeatedly questioned whether the changes would result in reduced insurance premiums for homeowners.

Barry Gilway, president and chief executive officer of the state-backed Citizens Property Insurance Corp., said Thursday the House bill would lead to reductions this year for some Citizens customers and eventually lower rates for other policyholders.

“While not providing immediate premium reductions to all Citizens policyholders, the legislation would go a long way toward stabilizing rates and shortening the time it takes for Citizens to provide rate reductions to its policyholders,” Gilway said in a statement.

--- News Service staff writer Christine Sexton contributed to this report.


All insurance policies require policy holders to take steps to mitigate their damages and protect their property from further loss. Failing to mitigate can result in a denial of the claim. .An AOB is necessary to hire professional people to dry out a water damaged home. Without an AOB, the policy holder must pay the contractor out of pocket when the work commences., If the carrier refuses to pay the claim, the contractor can file a lien on the property. If the policy holder can pay the contractor up from, the contractor will defuse the job and the carrier will deny or limit the claim for failure to mitigate.

Until the root of the problem is taken care of, the one who created and opened the door for scam artists and crooked contractors, nothing will change. When you do something about the mortgage companies that do everything they can to force you to sign an AOB, nothing will change. US Bank tries to force you to sign an AOB, and thousands of others do as well. Disaster victims just want to fix their homes, but between insurances denials, lousy settlements, low ball claims, then your mortgage company takes whatever you get, and they want to decide who can repair your home. Not the most cost effective way, but their way. Their way requires contracts with general contractors, all proceeds go to the contractor. Even if the bill passes the name will change, the rest will remain the same. Someone should have done a lot more homework on this, if you don't stop what causes the whole thing, nothing will stop. The banks will still continue to hold peoples claims/settlements. The bank will still continue to require contracts with general contractors, push for the AOB, and the banks will still only pay contractor and not the insured.

The original "bad actors" are the Insurance companies and unless their standard practice of low balling and denying claims is reformed with substantial penalties it's unfair to Floridians. There would have never been an AOB "problem" if Insurers dealt fairly and promptly with claims.


and you know this how?

Personal experience. The experience of family and friends and from talking to an Attorney friend. That you don't know that means you've been lucky.

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