The frequency of shady contractors swindling homeowners in insurance claims has dramatically increased since Hurricane Matthew devastated the area. The contractors’ method of deception is forcing a homeowner to sign an Assignment of Benefits (AOB). While most insurance policies allow for a homeowner to assign benefits to a third party, such an assignment is not required or mandated in order to receive benefits. Many contractors approach the homeowner with an AOB form and suggest that it must be signed before they can proceed with providing a repair estimate.
If you sign an AOB you can no longer deal directly with the insurance carrier to resolve your claim. The claims adjuster can only legally negotiate with the contractor and payments will be made directly to the contractor. Unfortunately, some contractors cash claims checks without making any repairs to the insured’s home.
There is currently pending before the 2017 Florida Legislature a bill that will greatly reduce the ability for contractors to defraud homeowners with AOBs. If passed, under the new law an AOB will not be valid unless it is signed by all persons insured under the policy and includes a seven-day period in which the insured may cancel or void the assignment without penalty. Most importantly, the AOB must contain a written, itemized, per-unit cost estimate of the work to be performed.
Until new legislation is passed, however, your rights as a policyholder and claimant could be compromised if you sign an AOB. If a contractor asks you to sign a contract, estimate or other document, contact our office and allow one of our attorneys to review the document with you and assure your interests are protected.