Florida Insurance Commissioner David Altmaier issued a warning to residents facing damage from Tropical Storm Gordon be careful and to make sure they fully read and understand any documents they sign in Gordon’s aftermath. Altmaier has been an outspoken critic of the ongoing assignment of benefits abuse happening in the state of Florida.
Many insurers throughout Florida have been seeing an uptick in litigation due to the inflated and fraudulent claims stemming from unlicensed contractors who have homeowners sign over their insurance policy rights in exchange for needed repairs to their homes.
Florida Chief Financial Officer Jimmy Patronis also issued a warning to consumers to protect themselves against fraud and has activated the Florida Department of Financial Services Disaster Fraud Action Strike Team (DFAST) for the 2018 hurricane season.
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On Wednesday, September 5, 2018 the Florida Fourth District Court of Appeals ruled that assignment of benefits (AOB) without all insureds’ and mortgagees signatures are unenforceable. The appellate court found no problems with an insurer requiring consent from all insureds and mortgagees, which is good news at a time when AOB abuse is such a big issue in Florida.
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Since Hurricane Season is underway, here’s a Daily Business Review article published by Roig Lawyers Partner Patricia Preciado that still holds true today.
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Aerial image of Florida Keys after Hurricane Irma
Filed under AOB, Assignment of Benefits, Claims Handling, Florida, Hurricane Andrew, Hurricane Irma, Hurricane Matthew, Insurance, Insurance Claims, Insurance Defense, Insurance Fraud, Lawsuits, Property Insurance
According to the Florida Department of Financial Services, Timothy Matthew Cox, owner of Nationwide Catastrophe Services, Inc. and Restoration Response Services, Inc., has been arrested for an alleged Assignment of Benefits (AOB) fraud scheme, stealing nearly $140,000 for home repairs due to tropical weather events that he never provided. Cox’s scheme impacted 19 homeowners throughout Florida and Texas, leaving the victims’ homes to sustain additional damage from other tropical weather events, including Hurricane Irma.
Cox’s team never started any of the work they were contracted to perform on the 19 homes after receiving insurance payments. He was arrested and booked into the Polk County Jail facing multiple counts of grand theft and racketeering. Cox could face up to 30 years in jail.
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Recently, there has been an uptick in changes to the language in the assignment of benefit contracts which emergency mitigation companies are having Insureds sign.
One of the changes in the contracts is that the Insured’s execution of the assignment of benefits authorizes the carrier to not only directly pay them for their services, but to also include them on all checks regardless of the coverage they are for. For example, if the carrier pays the insured under Coverage A for repair, Coverage C for contents, or Coverage D for additional living expenses, this contractual language may require that the AOB company be listed on these checks.
A second change in the contracts is that the assignment of benefits may have a single sentence seeking to exceed any emergency services cap the carrier’s policy may have. Once the carrier receives this contract, the clock begins ticking on the time frame for the carrier to respond. If the carrier fails to respond within the timeframe detailed in the policy, this cap is waived.
With an influx of insurance claims due to recent natural disasters, being aware of these changes is key to how you handle these claims. Hopefully, this overreaching on behalf of the AOB companies will be the final push needed to have some laws passed to regulate this AOB realm.
If you have any questions on this issue, please feel free to contact our First Party Property Team at email@example.com.
ROIG Lawyers attorneys have provided presentations on Assignment of Benefits as well as other areas that are beneficial to our clients in the Property Insurance industry. For more information on how to schedule a complimentary Continuing Education course via webinar or live presentation, please contact the Marketing Department of ROIG Lawyers.