An Assignment of Benefits (AOB) agreement might seem like a good idea. Property owners sign the agreement giving a third party (usually contractors) added authority.
The third parties file a claim, make repair decisions and collect payments from insurance companies. Property owners are not involved. It is supposed to relieve headaches associated with home repairs after natural disasters.
It accomplished that, but it also led to abuse. Recognizing fraudulent AOB practices and the possible negative consequences can help property owners decide if an agreement is a good idea. Florida House Bill 7065 adds extra protection.
It is important for both property owners, contractors and construction companies. There are benefits that they all need to understand.
Florida House Bill 7065 impacts contractors and construction companies
The new law establishes regulations. They must be followed by contractors, construction companies and insurance companies.
The bill requires AOB’s to include:
There must be an itemized, per-unit cost estimate of services.
Only estimates for the services that will be accepted. That can include repairs, restoration, replacement or measures needed to prevent future damage.
There are requirements before a lawsuit can be filed
A contractor who intends to file a lawsuit must provide a written notice to the insurance company. They must send it at least 10 business days in advance. The notice must include damage claims, the number of disputed damages and a request for a settlement.
The insurance company then has 10 business days to respond. They can demand an appraisal, offer a settlement or offer a dispute resolution. If that fails, they can proceed with a lawsuit.
Compliance with this new AOB law can help ease the problem. With some knowledge and work to adhere to the new policies, everyone can benefit.