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Florida Lawmakers Seek Insurance Reform

Q: Should there be limitations on a homeowner's right to make an "assignment of benefits" to contractors?

For the past five years, insurers and insurance litigation attorneys in Florida have failed to agree on terms for insurance reform surrounding the issue of assignment of benefits from policyholders to contractors, resulting in the death of any bills proposed. With back-to-back State House and Senate Banking and Insurance panel meetings to start the New Year, it remains to be seen if 2017 will be any different.

Can the source(s) of insurance claims abuse be identified and remedied?

Insurers warn reform is needed in order to hold off indefinite rate hikes. But many of the changes they seek are not acceptable to Florida insurance property claims attorneys seeking to protect homeowners' and contractors' rights.

Among the items on the insurers' so-called "wish list" of reforms are the following:

  • barring attorneys who represent contractors working under an assignment of benefits from seeking attorney's fees;
  • mandating written estimates of work to be performed;
  • limiting assignments of benefits to specific work, rather than the entire claim;
  • allowing consumers to rescind agreements;
  • prohibiting administrative fees in assignment of benefits (such as check processing, etc.):
  • stopping contractors from placing liens on work completed and paid for under assignment of benefits.

Insurers and watch dog groups blame a high volume of lawsuits over "non-weather related water emergency" claims for driving up insurance rates. The Florida Association for Insurance Reform ("FAIR"), one such watchdog group, supports proposals that require "stronger notice provisions" so policy holders understand that an assignment of benefits means they're signing over their right to collect insurance benefits to contractors. In addition, FAIR would support a ban on repair contractors "giving referral kickbacks" to plumbers who are often the "first responders" to flood emergencies

Currently, homeowners have protections under the law allowing them to recover their attorney's fees when suing insurers for over claims disputes. Specifically, if insurance companies are sued and settle for even one dollar more than the amount they originally offered on the claim, they can be required to pay the attorney's fees incurred by the homeowners for bringing the lawsuit.

Insurance claims attorneys have the homeowners' backs. While committed to addressing the reform of problems regarding "unscrupulous contractors", Florida Justice Association representatives promise to "vigorously oppose any attempts to take away homeowners' and their assignees' rights with respect to attorney's fees and limiting what homeowners can do with their insurance policies".

If you feel that your insurance company is not acting in good faith, won't return your calls, or is not paying insurance benefits you believe you're entitled to, you need the assistance of a qualified Florida insurance property claim attorney.

Call Jeff Pekar, Esq. at Pekar Law, P.A. for a no charge consultation at 813-712-8762. We serve clients throughout Florida, including but not limited to the Tampa Bay area, Naples, Fort Myers, Orlando, Daytona Beach and Pensacola.

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