AOB reform passes House subcommittee, but it wasn’t pretty - Florida Politics

AOB reform passes House subcommittee, but it wasn’t pretty

The Legislature has been arguing over assignment of benefits reform for years, to no avail. Tuesday, Tampa Republican James Grant found out why — the hard way.

The lesson was delivered by the House Insurance & Banking Subcommittee, which defeated by a single vote Grant’s bid to resolve the issue by boosting consumer protections and requiring the collection of data to allow policymakers to get a firmer hand on the problem.

The committee opted instead for an earlier draft of HB 1421, sponsored by Grant and Rene Plasencia, a Republican from Orlando. It passed, 14-1.

“You have a challenge of landing an issue that has multiple stakeholders on both sides. We tried to put something together that would have been the middle lane between the House and Senate proposals,” Grant said following the vote.

“We heard from people on both sides of that lane that they would prefer no bill or they would prefer the underlying bill,” he said. Now, “we’re going to continue working with all the stakeholders and committee members to see if we can find common ground.”

A major bone of contention was attorney fees. The bill as adopted would link fees to pre-litigation offers of judgment — if the plaintiff wins more than the insurer offers, the insurer pays; if less, the insurer collects.

The bill also requires that policyholders receive notice if a contractor files suit, and an opportunity to withdraw from the agreement without penalty.

Grant argued that would simply encourage unscrupulous contractors to spread out statewide in search of homeowners willing to sue.

He was unwilling to risk that.

“The question is, do we wrestle into the world of the one-way attorney fees, or do we simply try to make all the fixes (in his amendment) to reform the bad actors,” Grant said.

The amendment took a beating during testimony — contractors, insurers, attorneys, and business interests, for the most part, preferred the original language or nothing at all.

What might have killed the amendment, in the end, was uncertainty over whether it would lower insurance rates.

“If this isn’t going to lower rates, I’m not sure what we’re doing,” Tampa Democrat Sean Shaw said.

AOBs are contracts in which a policyholder signs away all rights to a claim in exchange for a quick repair. They’ve been on the upsurge in water damage claims, but they also apply to car and health insurance claims.

But they can be abused, leading to shoddy or inflated repairs and frivolous lawsuits, according to insurers and the state Office of Insurance Regulation. Trial attorneys argue lawsuits are reactions to insurers that reject claims or offer inadequate settlements.

Share On Facebook
Share On Twitter
Share On Google Plus
Share On Linkedin
Share On Pinterest
Share On Reddit
Share On Stumbleupon
Share On Youtube
Contact us
Michael Moline is a former assistant managing editor of The National Law Journal and managing editor of the San Francisco Daily Journal. Previously, he reported on politics and the courts in Tallahassee for United Press International. He is a graduate of Florida State University, where he served as editor of the Florida Flambeau. His family’s roots in Jackson County date back many generations.

Leave a Reply

Your email address will not be published. Required fields are marked *

Show Buttons
Hide Buttons