By Hanna Nakano | May 5, 2017, 11:01am
TALLAHASSEE – A bill in the state senate right now could have implications on the wallets of insured Floridians. An assignment of benefits reform bill passed the Florida House April 19 and now awaits vote in the Senate.
The bill was designed to close what many call a loophole allowing vendors in the state to charge insurance companies an inflated amount for repairs, based on the idea that if the insurance company contests the amount in court – they would still get paid. Currently, if costs are contested in court and the judgment is in favor of the vendor for any amount, the insurance company is required to pay the vendor’s attorney fees.
These cases can be time consuming, with attorney fees as high as $30,000 for a $10,000 dispute. Advocates of reform say this litigation costs the courts time, and ends up costing insured Floridians even more when insurance companies’ costs get passed down to the consumer.
“If this bill passes, I think it will hold insurance rates, keep them from going up. They may go up for other reasons, but it would keep them from continuing to go up because of the problems we’ve experienced,” Cam Fentriss, legal counsel for the Florida Roofing and Sheet Metal Contractors’ Association, said in an interview with the Florida Record. “If this bill passes, it will have a positive effect on the bank accounts of consumers.”
The bill, which passed 91-26 in the House, would regulate the payment of those attorney fees.
According to language in House Bill 1421, if the insurance company was ordered to pay at least 50 percent of the disputed amount, it would also be responsible for the individual’s attorney fees. If the judgment falls between 25 and 50 percent of the disputed amount, each party would pay their own attorney fees. Should the judgment fall below 25 percent of the disputed amount, the individual would be responsible for the insurance company’s attorney fees.
The bill, introduced by Representatives James Grant (R-District 64) and Rene Plasencia (R-District 49), is now backed by many of the state’s largest commerce, contractors and insurance groups.
“We praise Representatives Grant and Plasencia, as well as House leadership, for making AOB reform a priority and sending a bill with commonsense reforms to the Senate,” Logan McFaddin, regional manager of state government relations for Property Casualty Insurers Association of America, said in a statement. “With another hurricane season shortly upon us, we are hopeful in the final days of session the Senate will pass this good legislation that protects hardworking Floridians.”