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Using Insurance Proceeds to Pay A Contractor for Repairs Can I Sign over My Homeowner's Insurance Benefits to a Contractor?

Despite efforts by the insurance industry, you can sign over your benefits to a contractor you hire to repair your property. According to the Tampa Sun Sentinel, a set of bills that would limit repair contractors' power to have homeowners sign over insurance benefits before work can start are unlikely to become law this year.

The proposed bills seem to have reached a dead end because the House version stalled in committee and the Senate version was not taken up at the Senate Judiciary Committee's final meeting on April 15, 2015. That version was loaded with amendments making it more difficult to pass. Without that approval, the bill cannot go to the full Senate but a similar measure could be added as an amendment to an unrelated bill.

Insurers allege that South Florida water restoration companies pad repair bills, and if they are not paid, will unjustly sue insurers to force payment of inflated claims. As you might imagine, the contractors tell a very different side of the story, contending the following:

  • The practice allows repair work to start immediately without homeowners paying in advance hoping their claim will be paid by their insurer.
  • Contractors blame insurers for the lawsuits because they are slow to pay and refuse to discuss repairs with contractors.
  • Contractors claim insurers want homeowners to be the ones collecting benefits because they generally have little or no experience trying to obtain claims, do not know their legal rights and are easier to bully into taking lower payouts than seasoned contractors.

According to the Sun Sentinel, Florida Insurance Council spokesman Sam Miller said insurers need to do a better job at explaining how this practice increases expenses and leads to increased costs for insureds. Before the legislative session, bill supporters were unable to show homeowners' complaints about the practice or any data that illustrated how alleged contractor abuses lead to higher costs.

If you need help with a property insurance claim and live in the Tampa area, contact property insurance attorney Jeff Pekar by calling (813)712-8762 for a free consultation. Attorney Pekar will take time to understand the loss you suffered, how the insurance company has responded and help you better understand your legal rights.

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