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Will 2017 be the year lawmakers finally address the ‘assignment of benefits’ debate?

Tue Jan 31st, 2017 on     Homeowners Insurance,    

A few weeks back, our blog discussed how even though we were only a few days into 2017, the battle cry to repeal personal injury protection — or PIP — here in Florida had already been raised.

As it turns out, this likely won’t be the only recurring insurance battle in Tallahassee this year. Early indications are that state lawmakers will try for the fifth straight year to curb the ability of contractors retained by homeowners for repair work to “stand in their shoes” when seeking reimbursement from their insurer — otherwise known as assignments of benefits.   

Indeed, representatives from the Florida Office of Insurance Regulation and state-operated Citizens Property Insurance Corp. met with both the House Insurance & Banking Subcommittee and the Senate Banking and Insurance Committee earlier this month to initiate this effort, sharing their concerns that homeowners’ premiums would increase in perpetuity unless some manner of action is taken.

Specifically, these groups have long argued that these premium increases have been fueled in large part by borderline fraudulent practices by contractors hired by homeowners in Palm Beach, Broward and Miami-Dade counties who otherwise condition their performance of work to repair non-weather-related water damage on the signing over of benefits under homeowners’ policies.

While no bill has been formally introduced at this juncture, Citizens Property released a sort of wish-list in December outlining what it would like to see in any bill ultimately passed that has since gained the support of other players in the industry, including the Florida Association for Insurance Reform.

A few of the reforms being sought include:

  • Contractors would be required to include stronger warnings in contracts informing homeowners that they are signing over their right to collect benefits under their policy.
  • Contractors would be prohibited from providing plumbers, typically the first persons called to scenes of water emergencies, with referral kickbacks.
  • Contractors would be required to provide homeowners with the ability to rescind agreements.

It will be interesting to see whether reform efforts prove successful. While some are expressing hope that this will finally be the year state lawmakers decide to take action, there are already indications from key opposition groups, like the Florida Justice Association, that there will be challenges ahead.

Stay tuned for updates …

Consider contacting an experienced legal professional if you have questions or concerns regarding any insurance law matter. 

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