AOB Reform is a Work in Progress

The Senate Banking and Insurance Committee is working to find middle ground on the contentious, long-running disagreement involving Assignment of Benefits (AOBs) in Florida.

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Just like a doctor’s patient can give the physician’s office permission to handle payment issues with a health insurer, homeowners in the state have the right to assign the benefits of their property insurance to contractors they hire to remediate water damage and other items. The use of AOB allows the homeowner to not have to come out of pocket up front and also allows experts on remediation to defend their work to an insurance company, which will certainly use every expert they can in delaying or denying payment. Unfortunately, when this occurs, contractors seeking payment for their services are forced to file suit against the insurance companies.

Upset for contractors and homeowners using the court system to hold insurers responsible, property insurance companies have pressed lawmakers for the last four years to take away the homeowners’ right to assign benefits to their contractor. Unable to accept personal responsibility for a business practice that’s backfired on them, the insurers and their big corporate champions claim that the attorney fees they must pay when they lose cases for nonpayment brought by contractors as a reason for higher costs.

Dave DeBlander is the founder and owner of Pro Clean Restoration and Cleaning in Pensacola. He told committee members that some insurance companies deny claims as a business practice, and warned of another practice they are engaged in.

“With insurance companies not winning AOB and not winning attorneys’ fees, they are steering their clients to their vendor, which really hurts the consumer,” said DeBlander. “The consumer should be able to choose whomever they want.”

Senator Anitere Flores, the committee chair, and other members of the committee have been struggling with this issue for years. The focus of this meeting ultimately came down to one thing — the time has been long-coming to stop shifting blame and start offering solutions.

“We’ve spent four years talking about the problem, said Senator Oscar Braynon, speaking to Jeff Scott, chief executive officer and president of Gemini Financial Holdings and its subsidiaries, which includes Olympus Insurance Companies. “I get that. We want you, as the expert, as someone on the ground, to tell us what we should do.”

FJA member Lee Jacobson, a civil-litigation attorney in Orlando, recommended the law:

  • Allow the proposal for settlement from an insurance carrier to be made within a 90-day period.
  • If there are constant $1 proposals, or just numbers that don’t match to the issue of the claim, there should be a penalty for that because all it’s doing is encouraging more litigation.
  • All insurance carriers should show up to the loss timely —in at least three days.
  • Adjusters should be required to know what the standards are in water mitigation bill.

Florida’s Insurance Commissioner David Altmaier said that ultimately, what the state should try to do is change a behavior that is taking place in the market.

Senator Flores closed the meeting by saying that she looks forward to more formal discussion on the topic and then having a debate on a bill.


Brenda Welch is communications coordinator for the Florida Justice Association. Email her at BWelch@FloridaJusticeAssociation.org.

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