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New Coalition Forms to Stop AOB Abuse—You Can Help!

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Fraud is a trickster with many faces, but few things compare to AOB abuse for driving up the cost of homeowners insurance and damaging Florida’s business climate. What is AOB? Very simply, an “Assignment of Benefits” clause enables policyholders to sign over their insurance benefits to a third party like a repair contractor.

Florida legalized AOB as a tool for speeding the claims process by helping homeowners avoid paying money upfront. In practice, AOB has created a tsunami of trouble for homeowners, insurance companies—and honest contractors. Homeowners who sign a contract with an AOB clause can no longer even inquire about their own insurance claim. Worse yet, this clause leaves the door wide open for scheming contractors to overcharge and pad profits. AOB issues are reaching such epic proportions that Florida leaders have formed a Consumer Protection Coalition to ensure that homeowners maintain control of their own insurance policies.

The newly formed Coalition—bringing together consumer advocates, business leaders, real estate agents, insurance agents, and construction contractors—is inviting Florida homeowners to join the fight by signing the online petition at fightfraud.today. The website also provides consumer-friendly information that explains more about AOB fraud scheme. Urging Florida lawmakers to take action during the 2016 legislative session, the Coalition strongly supports the AOB reform legislation already filed by state Sen. Dorothy Hukill (SB 596) and Rep. Matt Caldwell (HB 1097).

Coalition members advocate that AOB is not necessary for efficient claim handling, even for emergency repairs. Homeowners can direct their insurers to pay the vendor without losing any benefit rights. Jennifer West, executive director of the Consumer Federation of the Southeast, calls the AOB fine print a “recipe for exploitation, fraud and manipulation.” Florida has experienced a hurricane in a decade, yet inflated claims and legal battles are forcing higher premiums toward a full-scale consumer crisis. AOB lawsuits have increased at a runaway rate from 9,424 in 2005-06 to 92,521 in 2013-14.

The state-run Citizens Property Insurance Corp. recently raised premiums by 8 percent in South Florida, primarily driven by non-weather-related water damage claims. Without these dubious claims and AOB lawsuits—which now account for more than half of every premium dollar collected—Citizens policyholders would have seen a rate decrease.

How do repair vendors feel about the situation? Cam Fentriss, a representative for the Florida Roofing and Sheet metal Contractors Association, said that every honest contractor should be concerned about AOB abuse and it impact on the insurance industry. “Contractors don’t need an AOB to get paid by insurance companies, and anyone who pressures homeowners into signing one gives a black eye to our entire industry of hardworking professionals. We fully support reforming AOB,” he concluded.

Mark Wilson, president and CEO of the Florida Chamber of Commerce summed up the urgency of the situation with these words, “Assignment of Benefits abuse is a huge threat to Florida’s families and businesses and must be stopped. Billboard trial lawyers and questionable vendors are taking advantage of AOB to essentially steal money from consumers and wreak havoc on our state’s insurance market. For the sake of attracting new businesses and jobs, we can’t let that happen.’’


This article is for informational purposes only and does not form a part of, replace, change or amend any terms, conditions, provisions or language within your Olympus Insurance policy. We encourage you to read your entire policy.

Olympus Insurance is licensed by the state of Florida. Information found on this site is intended for Florida residents only.