The House assignment of benefits fix cleared its last committee vote Wednesday, with co-sponsor James Grant conceding language addressing attorney fees and consumer choice in hiring contractors needs more work.
“The Florida House is not going to tolerate inaction on it,” Grant said following the Commerce Committee’s 21-7 vote.
“I think you’ll see pretty quick movement to the floor of the House, and I think you’ll see us move something over to the Senate to hopefully get their attention to move on something as significant as the assignment of benefits problem,” he said.
He said he would continue to work on PCS/HB 1421’s attorney fee provision, which establishes a graduated scale for determining whether contractors holding AOBs qualify to recover litigation expenses.
Basically, insurers would have to pay according to the degree they low-ball settlement offers.
“There’s still some work to be done there, I think, to get full consensus,” Grant said.
Additionally, “I think some of the vendors have legitimate concerns about the anti-steering language. There were a couple of things you heard today about making sure the homeowner’s choice is respected, but doing it in a way that we continue to bring down rates, and not disenfranchise the homeowner,” he continued.
“At the end of the day, if we just continue to focus on the homeowner, we’ll make the right decisions.”
AOB reform is this year’s top priority for Insurance Commissioner David Altmaier, who said it would go “a long way in addressing this issue.” Seventy-three percent of the rate filings his office approved in 2016 were for increases, Altmaier said.
Between 2010 and 2015, the industry experienced a 42 percent increase in water claims, 28 percent increase in their severity, and a trebling of assignment of benefits agreements, he said.
AOB-related lawsuits increased from around 400 in 2006, to more than 1,000 in 2011, to more than 28,000 in 2016.
“This is a consumer issue. This is not an effort to protect insurance companies. This is an effort to mitigate rate increases that our consumers are faced with,” Altmaier said.