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Port St. Lucie Restoration Firm Asks High Court to Overturn AOB Ruling

February 12, 2019 - 7:30am

In a closely watched case, a restoration firm asked the Florida Supreme Court on Monday to overturn a ruling that allowed restrictions on the controversial insurance practice known as “assignment of benefits.”

Attorneys for Restoration 1 of Port St. Lucie filed a 45-page brief at the Supreme Court arguing that the 4th District Court of Appeal improperly backed restrictions placed on a policy by Ark Royal Insurance Co. in a St. Lucie County dispute involving water damage to a home.

Assignment of benefits, or AOB as it is widely known, has been one of the most-controversial insurance issues in the state Capitol in recent years and will spur a fight during this spring’s legislative session. The brief was filed just hours before the Senate Banking and Insurance Committee was scheduled late Monday afternoon to take up a bill that would limit attorney fees in AOB disputes --- a key issue for insurance companies.

In assignment of benefits, homeowners in need of repairs sign over benefits to contractors, who ultimately pursue payments from insurance companies. Insurers contend that the practice has become riddled with fraud and litigation, while plaintiffs’ attorneys and other groups say it helps make sure claims are properly paid.

Restoration 1 of Port St. Lucie filed a lawsuit against Ark Royal Insurance Co after policyholders John and Liza Squitieri sustained water damage to their home. Liza Squitieri contracted with Restoration 1 of Port St. Lucie to do cleanup work and assigned the benefits to the firm.

Ark Royal, however, refused to pay the full amount requested by the restoration firm, pointing to an insurance contract that required approval from the husband, wife and the Squitieris’ mortgage company, PNC Bank, for benefits to be assigned to the contractor. Restoration 1 claimed breach of contract but lost in circuit court and at the 4th District Court of Appeal.

In the brief Monday at the Supreme Court, attorneys for Restoration 1 argued that insurance regulators have rejected such restrictions on assignment of benefits.

“To be clear, Ark Royal’s requirement that an AOB be signed by the mortgagee (the mortgage company) makes an insured’s post-loss assignment of benefits a practical impossibility,” the brief said. “Allowing it to stand not only eliminates an insured’s right to freely assign post-loss claims, but also does an end-around the normal legislative and regulatory processes that are in place to protect the citizens of Florida from such an overreach.”

The brief also contended that the restrictions are aimed at achieving the “insurance industry’s ultimate objective of eliminating AOBs.”

The case went to the Supreme Court after the ruling by the 4th District Court of Appeal conflicted with a ruling by the 5th District Court of Appeal.

Security First Insurance Co. took a case to the 5th District Court of Appeal after the Florida Office of Insurance Regulation rejected a company proposal to add similar AOB restrictions to policies. A panel of the appeals court upheld the position of the Office of Insurance Regulation.

The Supreme Court has agreed to take up the St. Lucie County case but has not scheduled oral arguments. Ark Royal is expected to file its initial brief next month.

As a sign of the heavy interest in the case, the Supreme Court has received requests from a variety of groups on both sides to file friend-of-the-court briefs. For example, an insurance industry group known as the Personal Insurance Federation of Florida, the Florida Insurance Council, the Property Casualty Insurers Association of Florida and the Florida Bankers Association filed a request in November to submit a brief on behalf of Royal Ark Insurance.

“This issue is of significance to property insurers throughout the state, who are often confronted with post-loss assignments of benefits which have not been executed by all parties who have an interest in the insured property,” the request said. “This issue is likewise of significance to banks who hold the mortgages and therefore have property interests in these properties, with a significant interest in ensuring that repairs are properly made, and with the consent of the mortgagee, as required in the mortgage agreements.”


Read people this is why everyone is bit%% that there rates are too high. These guys come in and make repairs that only benefit there pockets. Nobody should every sign an AOB you can fight the insurance company and get what is needed by yourself 98 percent of the time.

You have no clue what you’re talking about. If they make repairs or replacement to a property, isn’t the property owner benefiting? What it does is it takes the ability away from property owners to abuse contractors by getting them to battle the insurance company on their behalf and then choosing another contractor who is cheaper or just pocketing the money. A property owner isn’t forced to sign an AOB/C and 99% of the time has no problem with it... until the money shows up. Then suddenly they have mysteriously been wronged and play the poor little unknowing victim. And your comment about fighting on your own... get real. There is no shortage of policyholders that feel mistreated by their insurance company and have no idea where to turn.

I had minor storm damage to my roof and a company I contacted for repairs told me I should make an insurance claim. I did, and without full knowledge signed an “Assignment of Benefits” order. I only wanted a small repair done(less than 5k damages) and the roofing company submitted a claim for a FULL REPLACEMENT(mind you, this is an 8yr old roof). I did not want a replacement since it was not warranted, and after getting 2 other roofer estimates confirming a replacement was not warranted. Turns out this “AOB” wrote me off of my claim, and now the original roofing co is the insured suing my insurance company! They are billing my Ins company for a full replacement and attorney fees since the company denied the full replacement. Know wonder property insurance rates are driven up for these poor practices. Guess what? I’m left with the damage still, my insurance company is in a legal battle, and I’m out of pocket. BEWARE signing away your policy rights!!

Next to impossible to beat any kind of insurance company in Florida.

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