Policyholders Are No Longer Permitted To Assign Their Insurance Benefits in Florida

Florida’s Senate Bill 2-A, which went into effect on December 16, 2022, has brought significant changes to Florida’s property insurance landscape, particularly in the realm of Assignment of Benefits (AOB). This blog post aims to shed light on the implications of these changes for homeowners in Florida.

What is an Assignment of Benefits?

An “Assignment of Benefits” or AOB is essentially the transfer of contractual rights from one party to another. In the context of insurance, this means policyholders can assign their benefits, such as the right to receive insurance payouts, to another party. Once the assignment is made, the assignee gains the authority to enforce the insurance contract, including taking legal action against the insurer if necessary.

Prohibition of Assignment of Benefits

Although Assignment of Benefits were previously permitted in Florida, Senate Bill 2-A amended Florida law to prohibit Assignments of Benefits in certain circumstances.  The pivotal change brought about by Senate Bill 2-A is the prohibition of assigning any post-loss benefits under any residential property or any commercial property insurance policies issued after January 1, 2023. This means that property owners with policies issued after this date are no longer allowed to assign their insurance benefits to third parties.  However, homeowners with policies issued before 2023 are not affected by this change; they can continue to use the AOB process.

While the intent behind this change is to reduce the strain on insurers and potentially lower prices for consumers in the long run, its immediate impact on homeowners is notable. Ironically, while policyholders still bear the obligation to mitigate damage and protect their properties, insurers have made it more challenging to do so by eliminating the AOB option. This could potentially lead to policyholders facing difficulties in receiving prompt compensation and repairs, particularly in the aftermath of a disaster.

Navigating Home Insurance Claims Without AOB

Despite the changes, homeowners can still effectively manage their home insurance claims.  Some recommendations for homeowners to still effectively manage their claim, and receive prompt compensation and repairs, are as follows:

1. Document Everything: Keep detailed records of damage, repair estimates, and communications with your insurer. This documentation will be crucial when negotiating your claim.
2. Seek Professional Assistance: Hire a reputable contractor or service provider to assess the damage, provide repair estimates, and assist you in navigating the insurance claim process.
3. Legal Assistance: Consider consulting an attorney experienced in property insurance claims to guide you through the process, especially if disputes arise with your insurer.
4. Regular Communication: Stay in close contact with your insurer throughout the claims process, ensuring transparency and clear communication.
5. Advocate for Fair Compensation: Don’t hesitate to negotiate with your insurer to ensure you receive fair compensation for property damage and repairs.

Conclusion

The changes brought about by Florida’s Senate Bill 2-A regarding Assignment of Benefits have significant implications for homeowners. While the intent is to address concerns raised by insurers, the immediate impact on policyholders is increased responsibility in managing insurance claims.

Homeowners should be aware of whether these changes apply to their policies and, if so, be prepared to take a more active role in the claims process. By being proactive and informed, homeowners can still work towards fair compensation for their property damage and repairs, even in the absence of the assignment of benefits option.