TALLAHASSEE, Fla. — The highest-profile insurance issue of the 2019 legislative session is ready to go to the House floor.
The House Judiciary Committee voted this week to revamp laws dealing with the insurance practice known as assignment of benefits, which the insurance industry contends is riddled with fraud and costly litigation.
The House bill would make a series of changes in so-called AOB laws, including limiting fees paid to attorneys who represent contractors in disputes with insurers.
Assignment of benefits is a practice that has been used for decades and involves policyholders signing over claims to contractors, who then pursue payment from insurers.
Much of the legislative debate stems from claims about water damage to homes, though it also has extended to vehicle windshield-damage claims. Christine Ashburn is with the state-run Citizens Property Insurance.
“This absolutely is a crisis. We believe that this bill goes a long way to fix the problem and will absolutely have a rate impact for citizens," said Ashburn.
While insurers argue “bad actors” have used AOB to increase lawsuits and attorney fees, plaintiffs’ lawyers and other groups argue that assignment of benefits can help force insurers to properly pay claims.
Critics, including Reggie Garcia with the Florida Justice Association, say there is no guarantee that policyholders’ rates would decrease if the AOB changes are made.
“There is no rate freeze in this bill. There is no rate rollback in this bill. We would encourage you to look at that," said Garcia.
With this week’s vote, the bill has cleared its assigned committees and can go before the full House.
A Senate version, which includes significant differences from the House bill, has been approved by two committees and needs to be heard by the Senate Rules Committee.
