Did you know Florida continues to rank as one of the most expensive states for homeowners’ insurance? In fact, according to the Insurance Information Institute, the average premium rose from 30 percent between 2007 and 2015.
That’s not all, Florida’s legal expenses have grown more than twice the national average.
Coincidence? We think not.
According to a new report by the Florida Justice Reform Institute, assignment of benefits abuse continues to result in a significant cost for consumers for the eighth year in a row.
Insurers are here for you to help recover after a major weather event, but there are bad actors who are trying to stop that from happening. With hurricane season just two months away, we hope legislators will come up with a solution to stop this type of abuse.
It all started with homeowners and now it’s rapidly growing on the auto glass repair side. According to the Florida Department of Financial Services, in 2006, approximately 400 auto glass AOB lawsuits were filed against auto insurers. In 2016, nearly 20,000 lawsuits were filed. More and more victims with auto and homeowners’ AOB horror stories are coming forward and sharing their experiences.
Consumers are often approached at local car washes, gas stations, in parking lots or even at their homes, and are offered cash rebates, gift cards, or steak dinners by scammers who claim they can work with the person’s insurance company on a free windshield replacement. The repair company then convinces the consumer to sign an AOB authorization, but by doing so, the person essentially hands over all the rights and benefits of his or her insurance policy. Once the dishonest vendors have control of the insurance benefits, they team up with trial lawyers to inflate claims and then sue the insurance companies when they question the cost. Ultimately, these fake and inflated claims and lawsuits drive up the cost of auto insurance for everyone.
Very similar situations happen on the homeowners’ side, which is why Governor Ron DeSantis, CFO Jimmy Patronis and OIR Commissioner David Altmaier, along with numerous consumer advocates, real estate agents, construction contractors, insurance agents, and other business leaders have partnered to fight AOB abuse.
Together, we will continue to urge lawmakers to take action in order to protect their constituents from this type of abuse.
Logan McFaddin is the regional manager for the American Property Casualty Insurance Association.