|Date:||March 20, 2017|
Florida homeowners need to start taking action regarding an escalating problem that will lead to increases in their insurance premiums in the near future. Abuses of the Assignments of Benefits (AOB) process have already led to substantial insurance rate increases in South and Central Florida and it is only a matter of time before those premium hikes spread statewide.
The most common AOB arrangement involves transferring your home insurance policy benefits to a home repair vendor after an emergency, such as a plumbing leak or roof problem. With the contractor and their attorney now in control, claims can be inflated with unnecessary or phantom costs and attorney fees. And make no mistake, these inflated costs are passed on to policyholders when insurance companies calculate their rates.
Large areas of the state, particularly the tri-county area of Southeast Florida, have already been hit with double-digit property insurance rate hikes with more increases on the horizon if something isn’t done. State-run Citizens Property Insurance Corp. has calculated what will happen if lawmakers do not fix the problem.
In Palm Beach, for example, coverage for a residential structure with a value of $155,000 would rise from $2,210 this year to $3,559 in 2022. In Broward, that premium would jump from $2,390 to $3,850, and in Miami-Dade, the premium would increase from $2,926 to $4,712. Premiums for more expensive homes would go up even more.
For most Floridians, their home is their largest investment. Homeownership is still the key to the American dream and is vital to building strong communities. Floridians on fixed incomes are particularly vulnerable to increases in the ancillary costs of owning a home, such as property taxes, insurance and maintenance.
It is heartbreaking to see hard working families scrimp and save to be able to qualify for a mortgage only to learn that these overhead costs end up busting-the-budget.
These premium increases, mostly due to AOB scams, are already putting homeownership further out of reach for many families in South Florida and will start to impact families in other areas of the state without prompt legislative action.
The Assignment of Benefits process was envisioned as a tool to aid homeowners with disputed insurance claims. Unfortunately, it has been hijacked by unscrupulous contractors and attorneys who are enriching themselves at the expense of Florida families. That is why Florida Realtors® have joined the Consumer Protection Coalition to help put a stop to AOB abuse. Go to www.fightfraud.today to learn more and consider joining our effort.
Also, make sure to tell your state senator and representative to support meaningful AOB reforms that allow consumers to quickly and effectively repair damage to their home but also stop scammers from attempting to transform legitimate insurance claims into personal gain.
We all put in an honest day’s work for an honest day’s pay; they should do the same.
Maria Wells is the 2017 president of Florida Realtors.