By some accounts, Florida has the highest homeowner’s insurance rates in the country and rates keep rising, despite not having a major hurricane in the last decade. The culprit – a concentration of non-weather related water claims. In many cases, these claims are pushed along by unscrupulous contractors and attorneys.
According to Citizens Property Insurance Corporation (Citizens), the state-run insurer of last resort, 90% of all water damage claims come from the Miami-Dade, 30% of claims skip an inspection by the insurer and, as a result, many claims are packed with inflated costs. Because of one-way attorney’s fees that give contractors strong leverage, insurers tend to settle blindly and quickly in order to avoid legal costs, which means that Floridians will pay more in 2016. In fact, water damage claims will mean that 99% of South Florida homeowners will see pay increases next year, instead of pay decreases, according to experts.
The problem is Assignment of Benefits (AOB) is a process that was originally designed to help Florida’s consumers get their homeowner insurance claims paid more promptly by signing over control of their claims to vendors and contractors, thereby allowing insurers to pay vendors quickly and directly for repair work. In most states the process works just fine, but in Florida fraud has become a major problem and one that needs to be fixed.