Citizens Policy Holders Could See Rate Decrease This Year
For nearly a decade, homeowners’ insurance companies have been asking the legislature to help them address fraud within the Assignment of Benefits process. They argued extreme costs of litigation was causing rates to rise for policy holders, and some companies refused to write any new policies at all. Now they have a fix thanks to a new policy change. And rates are expected to dip.
An AOB, is when a policy holder signs over their benefits to a contractor who then works directly with the insurance company to recoup costs of the work. The fraud happens when a contractor exaggerates the price.
State-backed Citizens Property Insurance Corporation President Barry Gilway says they are proposing to drop rates for all of their policy holders as a result of the law being signed, and he expects other companies to follow.
“There certainly have been two or three that have indicated this will result definitely in a rate decrease but it might take some time for the results to show up in their numbers,” said Gilway.
Currently Citizens has over 825,000 policies in Florida.
The new law lets a homeowner who assigns their policy to a fraud business to rescind it within 14 days of signing. It also sets in place new guidelines for courts to use when determining who pays attorney fees.