Barrett Harding Insurance Encourages AOB Reform

Florida has experienced a 90,000% increase in Assignment of Benefits (AOB) lawsuits since 2000, according to the Consumer Protection Coalition, clogging an already overburdened judicial system with frivolous claims. Thats one of the primary reasons that Florida has one of the highest home insurance premiums in the nation “ a trend that has little chance of stopping unless meaningful AOB reform bills are passed during this years legislative session.

An AOB is an agreement that transfers the rights to an insurance claim from the policyholder to a third party, such as a contractor. It gives the third party authority to file a claim, make repair decisions and collect insurance payments on behalf of the homeowner. This practice, used frequently with medical claims, was originally designed to streamline the claims process, but some contractors use it to inflate their claim payments and even file claims-related lawsuits, with or without the policyholders knowledge or consent.

How prevalent is this issue?

  • A December 2018 Insurance Information Institute (I.I.I.) study found that Floridas auto and homeowner policyholders, through their insurance companies, have had to pay approximately $2.5 billion in legal costs since 2002 (Personal Injury Protection or Physical Damage auto claims in Florida are also ripe for AOB abuse).
  • These skyrocketing costs dont include excess claim settlement payments that I.I.I. estimates have also cost Florida auto and home insurance customers billions of dollars.

While contractors may play a part in AOB abuse, its ultimately the one-way attorney fee statute thats at the heart of the issue. The statute allows a plaintiffs attorney who sues an insurer, and loses, to be under no obligation to pay the insurers legal fees. But an insurer must pay a plaintiffs attorneys fees (often with a fee multiplier) in the event the plaintiff prevails.

The one-way attorney fee is the driving incentive which has brought bad acting contractors and attorneys together to take advantage of a law that was meant for individual homeowners, not business to business disputes. Florida is the only state in the country where access to the one-way attorney fee is being combined with an assignment of benefit.

The result? Insurers often settle and pay claims that are often inflated or sometimes even not covered by policy language to avoid paying hundreds of thousands of dollars PER CLAIM in legal fees. And there is NO LIMIT to legal fees that can be collected.

In essence, if a contractor holding an assignment were to demand $40,000 for a claim an insurer believes should cost $10,000, the contractor would only need to receive a judgment in court for $10,001 in order to receive an attorney fee award totaling six figures. This award is NOT shared with the policyholder who signed their rights away.

While past efforts to enact reform that will help curb AOB abuse have failed, we can be encouraged by the fact that Governor DeSantis has recognized and publicly acknowledged the issue. In his first State of the State Address, Gov. DeSantis said, I hope the Legislature passes legislation to reform the issue of AOB, which has become a racket.

AOB abuse, which almost acts as a tax Floridians must pay, has gone unabated for years, reaching epic, crisis proportions. Now is the time to for state lawmakers to pass legislation that will offer much needed “ and deserved “ rate relief to home and auto insurance consumers in the Sunshine State.

If the Legislature does not act, and these bills do not become law, the Office of Insurance Regulation estimates that consumers will see 10% annual increases in their premiums for the foreseeable future. With almost 6 million homeowners in our state, that increase means consumers would collectively be paying between $600 Million – $1 Billion more per year than the year prior. Floridas homeowners are bearing the full brunt of this hidden tax which is subsidizing the racket of a cottage industry who specialize in profiting off of the misfortune of others. SB 122 & HB 7065 are our only hope for ending the abuse and skyrocketing premiums.

About Barrett Harding Insurance

Barrett Harding is a multiple generation service-oriented insurance family with more than 80 years (40 in Florida) experience and commitment to our community. By being true to our ideals and doing what we do best, we continue a tradition of unrivaled service and advocacy to our clients.

In business in Florida since 1979, first as Dillion Agency, in 1986 we changed our name to BARRETT-HARDING, but the owners remain the same, today Lori Harding & Jeromy Harding carry on a tradition of service that began in central Ohio in 1952. With a professional staff and collaborative approach, we continue to specialize in Personal and Commercial products tailored to its clients needs. Visit to learn more about the agency.

Media Contact:
Jeromy Harding
[email protected]