After the Florida Senate approved a bill that would overhaul the controversial insurance practice known as assignment of benefits, Gov. Ron DeSantis didn’t hide what he intended to do it once it crossed his desk.
“The exponential growth in (assignment of benefits abuse) has contributed to mounting insurance costs for Floridians for far too long,” said Governor DeSantis in a release on Wednesday. “In recent years, there have been calls for reform and today, the Legislature took action. I thank them for their efforts in getting this done and I look forward to signing this meaningful legislation into law.”
Assignment of benefits, or AOB, is a decades-old practice in which policyholders sign over claims to contractors, who then pursue payment from insurance companies for work. Insurers contend changes are need because AOB has become riddled with fraud and litigation, driving up homeowners’ insurance rates.
Plaintiffs’ attorneys and many home-repair firms contend assignment of benefits helps ensure that insurers properly pay claims. The bill, which passed the House on April 11, includes limiting attorney fees in assignment of benefit disputes and allowing insurers to offer potentially lower-priced policies that would not allow assignment of benefits.
The Senate, in a 21-17 vote Tuesday, rejected a proposed amendment that would have required specific rate reductions for customers who accept policies that limit or do not allow assignment of benefits.
Sen. Janet Cruz, a Tampa Democrat who sponsored the amendment, warned of the bill offering a “false consumer choice” without meaningful rate savings. But Sen. Jeff Brandes, R-St. Petersburg, argued that numerous factors are used in setting insurance rates, including the costs of reinsurance, a type of backup insurance coverage for insurers.