Insurance policies are not enjoyable reading material; they’re long, confusing, and mostly, boring. That’s why most people file their insurance documents somewhere and forget about them . . . until their property is damaged and they’re desperate for help.
At Malik Law, we highly recommend you read through your policy and make sure you understand your coverage before disaster hits. This is especially important now, since Florida law has changed, and insurance companies can restrict policyholders from entering into assignment agreements with contractors to do repair work on their property.
I explain a little about the new restrictive policies in the video on this page, but want to go more in depth in this blog post.
Understanding Assignment of Benefits (AOB)
When your property is damaged by wind, water, fire, hail, or a sink hole, you naturally want to ensure your family’s safety and have the necessary repair work done as soon as possible. Most insurance policies allow you to do this by signing agreements with contractors that would assign your benefits to them. They are then responsible for collecting payment from your insurance company for the repair or replacement work on your property.
However, in the past ten years, as Florida insurance claims increased, insurance companies became more and more dissatisfied with this payment arrangement and advocated for change. After seven years of arguments, Florida state legislators were finally convinced that reform was necessary and in April, 2019, passed legislation, HB 7065, allowing insurers to offer policies that restrict the ability of insureds to enter into assignment agreements.
Understanding the New Florida Insurance Policies
While the Florida legislature has touted HB 7065 as a way to give consumers more options, Florida property owners need to carefully consider the advantages and disadvantages of different types of policies.
Beginning July 1, 2019, insurance companies will be able to offer policies that restrict “in whole or in part an insured’s right to execute an assignment agreement.” These policies will be cheaper than other policies, but if your property is damaged, you will not be able to choose who does the repair or replacement work on your property; your insurance company will choose for you.
What if the contractors or companies chosen by your insurance company do substandard work or install poor quality products? What recourse do you have? As long as your policy contains a notice about the restriction on assignment of benefits, your insurance company also offers policies with no restrictions, notifies consumers annually of its different options, and charges less for its restricted policies, you have no recourse.
If, on the other hand, you opt for an unrestricted policy, you will pay more for your insurance for the same coverage. However, you will have the advantage of being able to have some choice in determining who does repair work on your property.
Get Help with Your Florida Insurance Questions and Claims
At Malik Law, we’ve been helping clients with their property damage claims for many years and have seen how insurance companies try to underpay or deny payment for legitimate claims. Trusting these same companies to choose reputable, quality contractors to do repair work when you have a property damage claim is, therefore, somewhat worrisome.
If you’re concerned about the new restricted Florida insurance policies or about a property damage claim, please don’t hesitate to call us at Malik Law. We’ve helped hundreds of Floridians obtain satisfactory payment from their insurance companies and want to help you. Call today or submit the Free Case Evaluation form on our website for a free, no-obligation consultation.
Governor Ron DeSantis’ statement on passage of AOB reform by the Florida Legislature. (2019, April 24).
The Florida Senate. (2019). Insurance assignment agreements.