Demand Letter For Insurance Payment Template Property Damage 7 Things You Most Likely Didn’t Know About Demand Letter For Insurance Payment Template Property Damage

Liam Sigaud Published 4:00 p.m. ET Nov. 30, 2018



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Liam Sigaud is a administrator of Economic Policy and Analysis for the American Consumer Institute.(Photo: Special to The News-Press)

In the after-effects of Hurricane Michael’s destruction, Florida’s home allowance costs will anon be extensive an best high, but not primarily due to agitated storms or aberrant levels of flooding.

It’s actuality apprenticed by the corruption of a Florida allowance accouterment alleged “Assignment of Benefits” or AOB. 



AOB allows policyholders to alteration the rights to their allowance allowances to a third-party, like a roofer or added contractor, who again has the appropriate to balance the benefits. Over the aftermost decade, AOB accoutrement accept been exploited by adumbral contractors and arrant attorneys who adorn themselves at the bulk of Florida policyholders.

Recent abstracts from the Florida Justice Reform Institute shows that AOB corruption has developed acutely in contempo years. In 2007, there were 4,986  AOB-related lawsuits. In 2017, there were 129,781 — a added than 26-fold increase. In 2000, AOB action as a allotment of absolute allowance lawsuits hovered in the distinct digits. Aftermost year, AOB action accounted for added than 60 percent of all insurance-related lawsuits.

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James Whiddon looks over accident acquired by Hurricane Michael on Oct. 19, 2018 in Mexico Beach, Fla.  (Photo: Scott Olson, Getty Images)

A abstruse accouterment in Florida statutes accepted as “one-way” attorneys’ fees is abundantly amenable for this atomic advance in AOB litigation. Florida law dictates that plaintiffs who abound in an allowance altercation (including third-parties suing beneath AOB) are advantaged to accept their acknowledged fees paid for by the allowance company.

In added words, if the allowance aggregation loses the case, it charge pay the plaintiff’s attorneys’ costs in accession to its own. 

Alternatively, if the allowance aggregation wins a barmy AOB lawsuit, the plaintiffs do not accept to pay any acknowledged fees to the insurer.   

The absorbed abaft “one-way” attorney’s fees, according to the Florida Supreme Court, was “to ‘level the arena field’ amid the economically advantaged and adult allowance companies and the alone citizen,” as “the boilerplate policyholder has neither the affairs nor the ability to alone booty on an allowance carrier.”

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But able third-parties acting beneath AOB — including affluent law firms and ample contractors — exploit the aphorism to burden allowance companies into clearing claims and advantageous aggrandized bills. As a aftereffect of the “one-way” rule, backbiting attorneys accept little to lose in advancing meritless lawsuits.

Given the best Florida insurers face — pay an aggrandized affirmation or try to accommodate a lower payment, run the accident of accepting sued, and potentially accept to pay the plaintiff’s acknowledged costs — settling for a college bulk to abstain added action is generally the economically able option. 

Here’s how it works: Suppose your home is damaged by storm flooding. You alarm a architecture aggregation to adjustment the damage. On arrival, the company announces it can’t activate assignment until you assurance an AOB anatomy appointment any allowance allowances to them. You assurance the document, acquisitive to get your abode fixed. After the assignment is finished, the architecture aggregation — likely after your ability — sends your allowance aggregation a appeal letter gluttonous reimbursement. If the allowance aggregation altar to advantageous the (often inflated) bill, the architecture company’s attorneys, absorbed by Florida’s one-way fees rule, book a lawsuit.

In this Thursday, Oct. 18, 2018 photo, account crews set up new poles and account affairs in the after-effects of Hurricane Michael in Panama City, Fla. (Photo: Gerald Herbert, AP)

Facing a abiding acknowledged action with the disadvantage of potentially accepting to pay the plaintiff’s attorney’s fees, the allowance aggregation capitulates and settles the affirmation for far added than would accept contrarily been paid. To abide solvent, the allowance aggregation charge access premiums to awning these abstract payouts, and all their policyholders get a amount hike.

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The AOB crisis is active aciculate exceptional increases beyond the accompaniment and destabilizing abounding allowance companies that face an ambiguous future. Citizens Property Allowance Corporation, the state-run insurer of aftermost resort, predicts amount increases in 60 out of 67 Florida counties for 2019 due to the billow in AOB litigation.

With the acclamation abaft us, assembly in Tallahassee charge to act to stop this corruption and restore candor to Florida’s allowance laws.

Liam Sigaud is a administrator of Economic Policy and Analysis for the American Consumer Institute, a nonprofit educational and analysis organization. For added advice about the Institute, appointment www.TheAmericanConsumer.Org. 

Read or Share this story: https://www.tcpalm.com/story/opinion/contributors/2018/11/30/home-insurance-provision-driving-up-rates-guest-column/2139723002/

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