Romano: Insurers see a scam, critics see an excuse to raise rates
From Tampa Bay Times columnist John Romano:
Let's give them the benefit of the doubt.
Let's assume the attorneys are entirely benevolent, the insurance companies have your best interest at heart and the contractors haven't exploited a rigged system.
Even if that's all true, we may still have a problem.
Insurance claims for non-storm related water damage in homes are on the rise, both in numbers and in cost. The numbers are rising so fast, insurers say, that you will soon be paying higher rates because too many people are cashing in on a technicality.
"It's a bigger problem right now in South Florida, but it is absolutely coming up the state,'' said William Stander, executive director of the Florida Property & Casualty Association, an insurance trade group. "The use of these assignment (claims) is on the rise in both the Orlando and Tampa markets.''
At issue is a legal/business practice known as "assignment of benefits''.
Consumer advocates and insurance companies both agree the concept behind these assignment claims is a good one. For the most part, they exist to help individual homeowners bypass insurance red tape and get repairs done quickly.