Homeowners in Florida may be facing elevated insurance costs, a change linked to an insurance provision in the state called Assignment of Benefits, or AOB. According to experts, the elevated rates are not linked to increased payouts due to storms, floods or other homeowners' claims. Instead, AOB allows homeowners to transfer the rights to their benefits to a third party. In most cases, this third party such as a roofer or contractor accepts the assignment as payment for work on a damaged home.

The Florida Justice Reform Institute said that lawsuits by contractors who had carried out work under AOB provisions had risen dramatically in the past decade. There were 4,986 such lawsuits in 2007, but in 2017, that number had risen to 129,781. Assignment of benefits cases now comprise 60 percent of all insurance litigation. Florida law also notes that insurance companies that lose in insurance lawsuits will need to pay the plaintiffs' attorney fees in addition to their own. This provision is meant to protect homeowners who face unjust claim denials from their insurance companies, but in AOB cases, it often functions in the interests of contractors.

As a result, many AOB claims are settled outside of court with the insurer paying the contractor directly rather than pursuing additional litigation in court. The contractor may be able to impose higher prices for the work done than they could have if they were paid directly by the homeowner.

Of course, one serious risk is that insurance companies may try to mitigate these costs by passing them on in multiple ways to homeowners. When homeowners' insurance claims are denied, people may lack much-needed funds to fix their homes, despite paying into their policies for years. An insurance attorney may be able to help homeowners challenge claim denials and seek the benefits that they deserve.

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