There is a new crisis facing Florida homeowners concerning their insurance. A huge rise in water damage claims is currently blamed for the spike in insurance premiums. The problem has now drawn the attention of state lawmakers. But what has caused insurance rates to skyrocket? The Florida legislature is now taking aim at a common practice in the insurance industry known as “assignment of benefits” where homeowners sign over insurance benefits to hired contractors for completing repairs. The practice has both supporters and opponents.
Those who support assignment of benefits claim it helps homeowners receive the proper insurance compensation to pay for their damages. However, critics claim the practice is responsible for driving insurance rates through the roof. The situation has now gone all the way to Tallahassee, where state lawmakers are now trying to figure out new solutions. During this past week, the Senate Banking and Insurance Committee listened to testimony representing both sides. The House Insurance and Banking Subcommittee has also scheduled a special panel discussion. The problems concerning assignment of benefits are nothing new. Last year, the State Legislature spent considerable time trying to resolve the issue, but was unable to pass a new bill.
South Florida has become the epicenter of assignment of benefits practices. Huge increases of water damage claims in Miami-Dade, Broward and Palm Beach Counties as a result of pipe leaks are blamed. A huge increase of water damage claims has impacted the Citizens Property Insurance Corporation. The rise of insurance premiums is also blamed on assignment of benefits abuses which led to inflated or fraudulent claims. It has also resulted in the increase amount of lawsuits against insurance companies. Critics also claim assignment for benefits practices do not result in fast and better home repairs.
But there are two sides to every issue. During the hearing with the Senate Banking and Insurance Committee, representatives of contractors accused the insurance industry of failing to provide proper compensation to policyholders and delaying their insurance claim payments. They also claim assignment of benefits provides greater protection for small contracting businesses.
Consequences of Rising Insurance Rates
The problems concerning assignment of benefits go beyond just the insurance industry. Senate committee chairwoman Anitere Flores (R-Miami) believe AOB will have a negative impact on the growth of home ownership and new business opportunities. It may take significant insurance reform to ultimately resolve the problem. The insurance industry will also feel an impact. Officials from Citizens Property Insurance claim their company has the potential to increase their business by 50,000 policies in 2017 if private insurers no longer issue water damage claims in South Florida.
The Importance of Staying Informed
When it comes to homeowner’s insurance claims, knowledge is power. Most homeowners pay little attention to what goes on in Tallahassee. But these are important issues that can affect your insurance policy and how much you will pay for premiums. If you are the victim of unfair insurance practices, Miami insurance claims lawyer Jonathan Korin can help. Over the years, he has provided legal representation and counsel for home and business owners that need answers to these important questions. To learn more, contact the offices at Korin Law, P.A. and schedule a consultation today.