Insurers see trouble on Florida's horizon and want legislative changes
MIAMI -- Florida's homeowners’ insurance landscape has been treated gently by Mother Nature in the last decade, but the industry sees demons approaching that are increasing the cost and reducing access to affordable property insurance, especially in South Florida.
The culprit, according to officials at the Florida Chamber of Commerce's Insurance Summit Thursday in downtown Miami, are claims abuses by water damage repair contractors and their attorneys.
State law allows policyholders who need repairs to their homes to assign their rights to seek reimbursement from the insurance companies to third-party contractors. Some contractors persuade homeowners whose pipes or appliances have ruptured to assign over the benefits (AOB) and, working with attorneys, file lawsuits against the insurer if the claims are denied or payments are reduced.
Since 2006, the number of AOB claims In Florida exploded from 405 to 28,000 in 2016, said Chief Financial Officer Jeff Atwater, whose office oversees the Office of Insurance Regulation, at a noon address to the group.
"In these last couple of years, every pipe in every house has gone bad -- new and old construction -- or something else is amiss,'' he told the summit.
If the conclusion is that "someone is manipulating the process,'' only the Legislature can fix it, he said. Story here