How Florida’s New Assignment of Benefits Law will Protect You from Roofing Fraud

Starting on July 1st, 2019 the new Assignment of Benefits law will take effect, and more than likely it will affect you. 

If you don’t know what an Assignment of Benefits is…

…or how it can benefit you… it’s ok, your not alone. 

Read on to see what I mean. 

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What is an Assignment of Benefits?

According to the Florida Division of Consumer Services… 

…an AOB is an agreement that once you sign, transfers the insurance claims rights or benefits of the policy to a third party service provider.

This includes:

  • filing a claim
  • making repair decisions
  • collecting insurance payments

… all without the involvement of  you the homeowner.

The practice of AOBs has been a mainstay in the state of Florida for more than 100 years. The AOB was initially used for claims related to life and health insurance…

…but because of the frequency occurring with storm damage, it is now more popular with homeowner policies as well.

This process works for you the homeowner when navigating the claims process… as well as the contractors and restoration companies when it isn’t misused.

On the other hand…

…many service providers have taken advantage of policyholders, which resulted in:

  • property liens
  • lawsuits
  • and insurance fraud

…none of which placed any financial responsibility on the service providers.

Let me explain.


How an AOB Works

So how does an Assignment of Benefits work anyway?

Well, let me give you an example…

Suppose your home in Northeast Florida gets hit with a typical afternoon thunderstorm. Maybe worst case, a thunderstorm turns into a severe tropical storm. You never know what is going to happen in Florida with our weather! When this severe storm passes over your home, the high winds and rain can suddenly cause damages to your roof! Before you know it, water is pouring into your home through your ceiling! The next action is that you panic and call your Insurance company. Now you are faced with which direction you need to take with the new claim you have on your property.

After you call your insurance company, 

You have two choices…

  1. Begin the process of getting repair quotes, and start the process of haggling with the insurance company. Plan on spending a lot of your time meeting with contractors, checking reviews, availability, credentials, and so on.           or…
  2. Contact a reputable restoration company and sign an AOB.

As long as you choose a reputable company… you will come out having all of the repairs completed, without being involved in the process at all. Most of the time, your only responsibility should be your Deductible; resulting in having your home fully repaired back to pre-loss condition.

But, if misused, it could become a nightmare in many ways… including being held responsible for insurance fraud.


Should I Sign an AOB?

It depends…

Are you wanting to replace or repair your roof…

…but your insurance company isn’t giving you enough money to cover it? 

If so… you have the option of signing an AOB.

In this situation, your AOB contractor of choice can utilize their network of insurance professionals, to negotiate with your insurance company, for the full amount owed under your insurance policy.

By choosing a reliable, trustworthy Roofing contractor, or General contractor who deals with these exact details on a routine basis… they can help you get your roofing needs taken care of by your insurance company.

As an added protection to Florida property owners, the new AOB laws require that an AOB contract contains a provision allowing for the assignor to rescind the assignment agreement without a penalty or fee by submitting a written notice of rescission signed by the assignor to the assignee within 14 days after the execution of the agreement, at least 30 days after the date work on the property is scheduled to commence if the assignee has not substantially performed, or at least 30 days after the execution of the agreement if the agreement does not contain a commencement date and the assignee has not begun substantial work on the property. ​

Roofing Fraud | Assignment of Benefits Law | Quality Roofing Contractor


Why Insurance Companies Don’t Want You to Sign an AOB

If you find out that insurance companies are short paying you, its because they want to save money.

So, rather than accepting a number that the insurance company gives you… Signing an AOB with a reputable contractor can virtually guarantee that the insurance carrier pays for all the work incurred despite the low-ball values they have placed on the loss/damages.

Remember the insurance companies are not going to look out for your best interest! They are a for-profit business and the less they pay on the claim the better of their bottom line is.


Tips When Using an AOB

Before signing an AOB, review your insurance policy to ensure you have clarity on your responsibilities following a loss. 

Use these tips when opting for an AOB:

  • Do not let the insurance company bully you! 
  • Personally contact your insurance company when damage occurs, as soon as possible, then contact a licensed contractor.
  • Maintain control – Refuse to sign any documentation that resembles power of attorney legalese as this may relinquish control
  • Do not let them pursue you to go with their “preferred contractor”
Roofing Fraud | Assignment of Benefits Law | Quality Roofing Contractor


Red Flags to Watch out For

An AOB can often work in your favor, saving you a lot of money for repairs and alleviating hassles and headaches. But, there are red flags you should make you wary of signing an AOB. Here are a few items to consider when choosing a contractor:

1. Unprofessional

Do not sign documentation they have if…

  • They are not willing to explain the contract in its entirety.
  • They are dancing around your questions.
  • They are promising you money back to go with them. This is fraud!!
  • They are requesting money up-front to start the job?

Why would you give anyone a deposit or up-front money for services not rendered yet? If they require money up front they probably do not have the financial resources to even start or finish your job/project! You should immediately take them off your list of contractors that you are interviewing! 

This could result in alteration of contracts after you sign.


2. Out of state or non-local companies

Many of the fraudulent issues have occurred when Florida residents work with non-local companies. 

These contractors will prey on homeowners following a storm… promising fast repairs and many times submitting claims with inflated pricing. 


3. Feeling pressured or rushed to sign

If you’re not given ample time to review documents…

Make sure all your questions are fully answered.

… or if there’s paperwork besides the AOB, this is a sign to run the other way.

You should always feel at ease and of a clear conscience before signing a AOB! 

(Yes I am a contractor who strongly believes this!)


4. Never pay upfront

Quality contractors are accustomed to being paid in full upon completion of a job well done. 

Anyone who demands direct payment from you before any work is not a party you should conduct business with. 

When searching for contractors, do your research.

Check reviews, ask friends, and neighbors, etc. 

New or non-local companies having little or no positive feedback should raise a red flag for you. 


How the Law Protects You

After many fraudulent claims, Florida’s new bill includes the following provisions that are intended to provide protection for consumers like you…

  • “Assignment agreements” have now been defined. and requirements have been established for the execution, validity, and effect of these agreements
  • Service providers are now required to give the consumer and insurer prior written notice of 10 business days or more, before filing suit on a claim
  • The state’s one-way attorney fee has been revised, incorporating an attorney fee structure to help determine the fee amount awarded by an assignee against an insurer
  • Insurers are now allowed to make a policy available that prohibits assignment under certain conditions
  • Insurers are now required to report specified data on claims that were paid under assignment agreements in the prior year, with the deadline being January 30, 2022 and each year after
  • Certain pre-lawsuit duties will transfer under the insurance contract to the assignee, shifting the burden to the assignee and making them prove that any failure to carry out these duties hasn’t limited the ability of the insurer to carry out the contract
  • Certain fees are now prohibited along with the altering of policy provisions relating to managed repairs for an assignment agreement
A vast majority of the time, a homeowner should only be exposed to a deductible when they have suffered damage to their insured property.
The homeowner is responsible for making the first contact with their insurance company. It is not necessary to sign an AOB to get an insurance claim processed or to get a residence repaired.

Are you in need of roof repair or roof replacement?

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