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Citizens urging customers to look out for AOB scams post-Matthew

Mon Oct 10th, 2016 on     Homeowners Insurance,    

While the phones at state-run Citizens Property Insurance Corporation — the insurer of last resort for thousands of Florida property owners who cannot otherwise secure the necessary coverage on the private market — will undoubtedly be ringing off the hook in the coming weeks due to the fallout from Hurricane Matthew, officials want the call volume to be even higher.

Indeed, Citizens Property is now imploring policyholders to take care to contact them first, meaning before they sign any sort of agreement with a contractor, roofer or other repair outfit, in order to make certain that they stay in control of their claim and don’t fall victim to assignment of benefits scams.

What do assignment of benefits scams involve?

When an insured party signs an assignment of benefits contract offered by a contractor, roofer or other repair outfit, it essentially serves to transfer all rights and benefits to them. This includes the right to submit claims, file lawsuits and, more significantly, collect payment directly from the insurance company.

Why is this problematic?

By signing an AOB contract, a property owner no longer has the option of changing contractors or withholding payment if the work performed is unsatisfactory, undertaking comparison shopping for the best contractor in their situation, or taking action should the contractor misrepresent the claim filed.

Signing an AOB could also mean that the property owner is left with partial repairs or an obligation to pay a balance if the insurance covers less than is demanded by the contractor. Furthermore, failure to abide by the loss reporting and repair requirements set forth in a policy might mean a loss of coverage.

When are property owners most likely to be presented with an AOB contract?

Experts indicate that the unfortunate reality is that AOB contracts are most likely to be offered in the aftermath of disasters like Hurricane Matthew. Specifically, when distressed property owners seek emergency repairs or when salespeople go door-to-door in affected neighborhoods soliciting repair-related business.

Here’s hoping the word gets out about the disadvantages of these AOB contracts.

Remember that if you have concerns relating to denied or delayed claims under a homeowners’ or flood insurance policy to consider speaking with a skilled legal professional as soon as possible.

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