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Governor Signs AOB Legislation Into Law

Homeowners Insurance Application on a table with a pen and book
Adobe Stock

Contractors will now have to let insurance companies know when they’ve been assigned a policy holder's benefits. This change comes after Governor Ron DeSantis signed HB 7065, which makes changes to insurance agreements.

For nearly a decade Florida’s homeowners insurance market has been facing a manmade crisis called assignment of benefits (AOB).

AOB happens when a policy holder signs over insurance benefits to a contractor who then negotiates directly with the insurance company to pay for repairs. The abuse of AOB has caused insurance rates to rise and some companies to stop writing policies.

The bill signed into law makes several changes to address the issues. One requires contractors to let an insurance company know if they’ve entered into an AOB with a policy holder.

Barry Gilway, president of state backed insurer Citizens Property Insurance, explains the need.

"Today, they don’t even let us know there’s an AOB," Gilway says. "In 47% of the cases today for Citizens, we get a suit in and there’s never been any issue raised by the customer regarding the settlement amount." 

Gilway believes if insurance companies know early on, they will have time to communicate and negotiate before lawsuits are filed and court costs and associated fees have to be applied.

Ultimately the hope is that this will decrease homeowner’s insurance rates across the state. The law goes into effect July 1, 2019.

Blaise Gainey is a State Government Reporter for WFSU News. Blaise hails from Windermere, Florida. He graduated from The School of Journalism at the Florida A&M University. He formerly worked for The Florida Channel, WTXL-TV, and before graduating interned with WFSU News. He is excited to return to the newsroom. In his spare time he enjoys watching sports, Netflix, outdoor activities and anything involving his daughter.