Lawmakers look to change the way assignment of insurance benefits works

TALLAHASSEE, Fla. (CAPITOL NEWS SERVICE) - Florida has some of the highest insurance rates in the nation and according to the industry, they are rising because of abuses in what is called assignment of benefits, or AOB.

Changing the law could impact how you get your home repaired after it's been damaged.

After Michael hit Panama City, Jasmin Tolbert told lawmakers that contractors were knocking down her door.

“Trying to get me to sign forms so they could 'help' me,” said Tolbert.

Those contractors wanted her to sign an assignment of benefits, giving the contractor the right to bill the insurance company directly. Signing that form has led to the doubling of lawsuits over the last five years.

“The primary driver of abuse is the way attorneys get paid,” said James Lynch with the Insurance Information Institute.

Called "one way", most legal fees fall on the insurer.

“The resulting costs are like a hidden tax on consumers,” said Lynch.

One proposed change would continue to protect homeowners in their fights with insurers, but place the potential for paying legal fees on contractors who accept an assignment of benefits.

“And that if you assign your benefits to a third party, that third party does not get the benefit of that one way attorneys fees,” said Florida Insurance Commissioner David Altmaier.

Water restoration companies say the problem is lowball estimates from insurance companies.

“Right now, the insurance companies are paying on average around 20 to 25 percent of what the estimates are,” said Josh Reynolds with Right Way Emergency Services.

Both sides agree that only a small number of companies and lawyers are abusing the system. The restoration people who say they are the good guys say regulating their industry more would weed out the bad apples.

"They probably don’t have the educational training, probably don’t have the financial ability to train their people in mold, so absolutely, you get rid of them,” said Foyt Ralston with the Florida Association of Retail Specialists.

Depending on which way lawmakers go, how much you pay for insurance and whether or not you get your home repaired could be at stake.

Without being able to bill insurance companies directly, many contractors won’t risk taking on big jobs without a guarantee of getting paid or being paid up front.