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Wall Street Journal op-ed highlights assignment of benefits abuse

An op-ed in The Wall Street Journal Tuesday called out the assignment of benefits (AOB) system in Florida, saying the abuse of AOB by trial lawyers will get Florida taxpayers “whacked with Category 5 bills.”

“Florida homeowners already face risks from hurricanes, hail storms and other natural phenomena,” the article states. “Do they need to face the unnatural disaster known as plaintiff’s attorneys too?”

AOB is a system where homeowners can sign over the rights to their insurance policy after a catastrophe or other property damage. Whoever gets the rights to the policy then can sue an insurance company for repair costs.

Florida law requires insurers to pay lawyer fees if they lose in court or settle for an amount more than an insurer’s initial offer, which has led to some inflated settlements for home repairs.

The Op-Ed points to statistics released by state-back Citizens Property Insurance Corp., which has seen the number of litigated claims jump from 12 percent in 2011 to 45 percent in 2016. The average settlement for non-wind claims has nearly doubled over the same stretch, from $10,301 in 2011 to $19,966 last year.

Because of AOB abuse, the article asserts, Floridians pay some of the highest home insurance rates in the nation. Citizens’ average policy in Miami-Dade rings in at $2,678, and the Florida Office of Insurance Regulation says it and other companies may need to raise rates by 10 percent or more to break even.

“How long can homeowners bear double-digit premium hikes? Florida’s insurance commission is worried that consumers will eventually drop private insurance, or private insurers will close up shop — or both, especially in Southeast Florida, where AOB abuse is concentrated. Citizens would then be forced by law to step in and offer a below-market rate policy. Taxpayers would absorb the losses.”

The article points to a bill by Republican Sen. Dorothy Hukill (SB 1038) as a possible solution, but laments “the state’s powerful plaintiffs-lawyer lobby, and competing bills would bless the trial bar’s practices.”

Written By

Peter Schorsch is the President of Extensive Enterprises and is the publisher of some of Florida’s most influential new media websites, including Florida Politics and Sunburn, the morning read of what’s hot in Florida politics. Schorsch is also the publisher of INFLUENCE Magazine. For several years, Peter's blog was ranked by the Washington Post as the best state-based blog in Florida. In addition to his publishing efforts, Peter is a political consultant to several of the state’s largest governmental affairs and public relations firms. Peter lives in St. Petersburg with his wife, Michelle, and their daughter, Ella.

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Florida Politics is a statewide, new media platform covering campaigns, elections, government, policy, and lobbying in Florida. This platform and all of its content are owned by Extensive Enterprises Media.

Publisher: Peter Schorsch

Contributors & reporters: Phil Ammann, Jim Rosica, A.G. Gancarski, Joe Henderson, Janelle Irwin, Dan McAuliffe, Jacob Ogles, Scott Powers, Bob Sparks, Andrew Wilson.
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St. Petersburg, Florida 33704

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