Assignment of Benefits in Florida: What Homeowners Need to Know

Florida's property insurance landscape underwent a significant change with Senate Bill 2-A, affecting how homeowners can work with contractors and service providers after property damage.

AOB Contracts and Recent Legislative Changes

An Assignment of Benefits (AOB) allows homeowners to transfer their insurance rights to a third party, like a contractor, who can then deal directly with the insurance company.

However:

• As of January 1, 2023, policyholders with new residential or commercial property insurance policies can no longer assign their post-loss benefits to third parties

• This prohibition prevents contractors from directly billing insurance companies and taking legal action if claims are denied

• Homeowners with policies issued before 2023 can still use the AOB process

• These changes were implemented to address rising insurance costs and litigation but have created new challenges for homeowners.

Potential Pitfalls and Benefits

Potential Benefits of the AOB Ban:

• May lead to lower insurance premiums long-term

• Reduces fraudulent claims and excessive litigation

• Gives homeowners more direct control over their claims

Potential Pitfalls for Homeowners:

• Must pay out-of-pocket for repairs before receiving insurance reimbursement

• Need to personally navigate complex claims processes

• May face challenging negotiations with insurers without contractor assistance

• Could experience repair delays while awaiting insurance payments

Decision-Making Framework for Property Repairs

For homeowners managing repairs after the AOB changes:

1. Document everything: Keep detailed records of damage, repair estimates, and all communications with your insurer

2. Evaluate contractor payment terms:

   • Ask about payment schedules

   • Inquire about financing options

   • Consider insurance direct payment authorization forms

3. Professional assistance options:

   • Public adjusters can help navigate claims (for a fee)

   • Legal representation may be necessary for disputed claims

   • Industry associations can provide contractor referrals

4. Red flags to watch for:

   • Contractors demanding large upfront payments

   • Pressure to sign contracts immediately

   • Vague estimates or contracts

At Innocent Law Firm, we help Florida homeowners navigate the evolving insurance landscape. Contact us to understand how these legislative changes affect your specific policy and claims process.

⚠️ Disclaimer: This information is for educational purposes only and does not create an attorney-client relationship.