'AOB' overhaul backed in senate

In the highest-profile insurance issue of the legislative session, a Senate committee Monday approved an overhaul of the controversial insurance practice known as “assignment of benefits.” The Senate Judiciary Committee voted 5-1 to pass the measure (SB 122), sponsored by Sen. Doug Broxson, R-Gulf Breeze. Broxson and insurance-industry officials argue restrictions are needed on the so-called AOB process because litigation and fraud are driving up insurance rates.

“Our constituents are watching, and they want an affordable premium,” Broxson said before the committee voted. But Sen. Jose Javier Rodriguez, a Miami Democrat who opposed the bill, said the restrictions would take away rights from consumers. “Absolutely, I think consumers are going to be hurt by this,” Rodriguez said. In assignment of benefits, property owners in need of repairs sign over benefits to contractors, who ultimately pursue payments from insurance companies.

While insurers argue the practice has become riddled with fraud and litigation, plaintiffs’ attorneys and other groups say it helps make sure claims are properly paid. The debate initially stemmed from water-damage claims to homes but has expanded to include vehicle windshield-damage claims. Broxson’s bill would revamp attorney fees in AOB disputes and also make a series of other changes involving claims and restoration work.

For example, it would place limits on assignment of benefits in emergency circumstances. It would include a maximum payment of $3,000, or 1 percent of a homeowner’s coverage limit, when AOBs are used for emergency repairs to homes. The House Insurance & Banking Subcommittee on Tuesday will take up the House’s version of an AOB bill (HB 7065), sponsored by Rep. Bob Rommel, R-Naples.