A much-needed reform to Florida's Assignment of Benefits will be taking place on July 1st. Florida Governor Ron DeSantis signed House Bill 7065, which marked the end to a seven-year war by the industry and reform advocates, who were looking for a solution to the escalating abuse of the policyholder benefit.
For those who need the refresher; an Assignment of Benefits, or an AOB, is a document signed by a policyholder that allows a third party, such as a water extraction company, a roofer, or a plumber, to "stand in the shoes" of the insured and seek direct payment from the insurance company. This information was pulled from the Florida Office of Insurance Regulation.
Eric Sain, President of Florida Realtors, had this to say about the matter, "the abuse and cost-drivers associated with AOB have been a growing problem that directly impacts the ability of people to maintain the American dream of homeownership." Eric Sain, President of Florida Realtors, continues on the matter, "Thanks to the leadership of Governor Ron DeSantis, Senate President Bill Galvano, House Speaker Jose Oliva, Sen. Doug Broxson, and Rep. Bob Rommel, we now have meaningful reform in place to help curb rising insurance premiums while preserving the benefits and intent of the AOB process."
This could be a giant leap forward in considering how awful the old AOB policy was. This new law could abolish the AOB abuse seen by many individuals or possible homeowners over the past two decades.
In the State of Florida alone, AOB abuse has sparked an insurance crisis. According to the Insurance Information Institute (III), there were roughly 1,300 AOB lawsuits in Florida in 2000. Just three years later that number skyrocketed to 79,000. Then come 2018 the number of AOB lawsuits hit 135,000 through November.
Under this new law, attorney fees are now governed by a formula that looks at the differences between a pre-trial settlement offer and the final judgment. This would take off stress from potential homeowners, home sellers, and real estate agents alike. If we can see this and President Trump's ideas for building more homes come into the light, then we can see the market for housing skyrocket. These opportunities would also help save you time, money, and stress during the process of selling or buying a home.
Here at SETCO, we want you to stay updated on all things closing, selling, buying, or fraud related, so you know what's going on in the real estate world. SETCO has also partnered with Qualia, which helps make us the safest closing company you can find.