Assignment Of Benefits Legislation In Florida

The practice known as the Assignment of Benefits (AOB) is a big problem for Florida property insurers. AOBs have been driving up the cost of property insurance claims in the state for several years.

An AOB is a document signed by a policyholder that allows a third party, such as a water extraction company, roofer, or plumber, to "stand in the shoes" of the insured and seek direct payment from the insurance company. AOBs have become prevalent in water and roof claims across Florida.

AOBs have been a part of Florida's marketplace for more than 100 years. Loopholes in the way they are used in the marketplace are driving up costs for homeowners across the state due to unnecessary litigation associated with certain AOB claims. According to the Florida Department of Financial Services, there were 405 AOB lawsuits across all 67 Florida counties in 2006, and by 2016, that number had risen to 28,200.