Monday, June 15, 2015

Florida Assignment of Benefits in Restoration

Recently in the state of Florida the insurance industry lost a case to remove the dreaded assignment of benefits, which secures the contractors rights to the proceeds during an insurance claim.  This is a simplified explanation but you get the point. 

Decisions like this do not come in a vacuum so there are now consequences.  The insurance companies obviously don’t like this because they do not have the same control over the claim as they otherwise would. If you want to receive work from insurance companies they you cannot use the AOB in your contract language.  If you participate in most vendor programs you are not allowed to use this clause in your contract.   In some markets the insurance companies are aggressively working to keep these contactors off their claims. 

If you are a quality contractor trying to be independent and not participate in program work then you cannot use AOBs.  If you are on a program then you have a contract that prohibits you from using this tool.  If you are not on the programs then you are often blackballed by the insurance industry.  This creates a real challenge fro the contractors that are playing by the rules yet want to have some control over payment.  On the other hand – there are many companies that use the AOB to secure payment even if they are overcharging (who determines this?) or if they perform substandard work. 

This is potentially setting up like the Colorado anti-steering law from several years ago – Joe Arrigo where are you?  Do you want to move to Florida and continue the fight?

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