AOB Reform…Good & Bad News!

Last week’s bad news was disappointing but, not unexpected. Legislation reforming Assignment of Benefits (AOB) in 2015 is dead, having failed to even muster a hearing in the Senate Judiciary Committee chaired by Senator Miguel Diaz de la Portilla-R. The House version has languished in the Regulatory Affairs committee chaired by Representative Jose Felix Diaz-R. Neither committee is scheduled to meet again this session. 

Again, bad news.

The good news is that the bad news is so bad, the abuse so flagrant, the impact on costs so pronounced, the good fight will not abate. There’s no choice!

And, there’s the Security First Insurance Company (SFIC) lawsuit. A decision from the 1st DCA could arrive any day now and some believe it could reform AOB even more cleanly than SB-1064 and HB-669. Legislation involves politics, which involves compromise, which in this case meant some buy-in for some of the offending groups. In the future we need to deal more definitively with tributary issues like plumber kickbacks, a complete lack of regulation for water extractors, attorney fees and unsavory inducements by roofers.

Until then this fight can be about getting policyholders to understand the danger of AOB. After all; AOB abuse goes away if AOB contracts are never signed.

For now, I intend to do all I can to keep every homeowner from ever signing an AOB contract from either of the primary offenders, roofers and water extractors. After all, their work can be (and often is) performed by those who don’t use AOB and who, therefore, are more reliable as to workmanship, warranty’s, customer satisfaction and most assuredly fair pricing.

As for water extraction, insurers need to continue doing what they can to let their agents and policyholders know how to avoid rip-offs and how to get quality workmanship at a fair price. This includes endorsing preferred providers that don’t use AOB.

AGENTS–like it or not, you are on the front line in this fight. Over half of any agency’s annual homeowners claims are for water damage and, along with hail claims from crooked roofers, that’s likely to increase. Even without a storm. Make sure your agency does not recommend a vendor that uses AOB; water extractors, roofers, contractors of any type. There is exposure for doing so. And, if you only provide a list of so called “vendors you can call” as a means to avoid that liability, you’re still exposed. Review your list(s) and your practices in this regard, caution clients about AOB and remove names of vendors that use AOB from any lists provided to clients.

Literally, agents in some areas are restricting their writings due to the frequency of abuse by these so called roofers. Their clients, many with old roofs, find it hard to say “no” to a free replacement. But, their clients and yours should at least know about the dangers of AOB and the potential of being complicit in an insurance fraud scheme.

How do you know who uses AOB and who does not?

First of all, for water extraction, recommend only the vendors carriers recommend; not local providers who may be clients, unless you know they don’t use AOB. Or, either include on your “call” list or recommend Rytech, a vendor I have fully vetted and endorse. (See NOTE #1 below).

Next, avoid recommending members of the Florida Association of Restoration Specialists (FLARS). Testimony during this year’s legislative hearings, and other sources, confirms its almost a certainty they not only use AOB but are well schooled in its abuse. (See NOTE #2 below).

And, when it comes to those roofing entities combing neighborhoods promising everyone a “FREE ROOF”, monitor what’s taking place and report any shenanigans to the Department of Financial Services (DFS) confidential hotline. (See NOTE #3 below).

Finally, let me know what’s going on. I’ll protect your identity, write about it here and pass it on to those who can help.


NOTE #1: You should find all the information you need on Rytech in my recent blog “Rytech–A company agents can trust!”. For those interested, Rytech is available anywhere in the state, is experienced in both commercial and residential remediation, guarantees its work and is the preferred vendor of more carriers than any other water extractor.

NOTE #2: FLARS has ties to the Orlando law firm of Cohen & Battisti known for its seminars on “Insider Secrets” on AOB.  Attending almost every hearing and usually testifying, were Jeff Grant and Jon Lavender. Jeffrey Grant is a director of FLARS and owns Bone Dry Restoration and Cleaning, Inc. located in Tallahassee. Jon Lavender is also a FLARS director and owner of Insurance Fire & Water Restorations, LLC located in Fort Myers. Both gentlemen tout their FLARS membership and heavily advocated the use of AOB to lawmakers.

NOTE #3: The Division of Insurance Fraud (DIF) handles complaints regarding emergency remediation or roofing fraud and AOB. It is currently investigating nearly 200 such complaints against roofers in the central-west Florida area alone. If you observe behavior that looks like fraud or the inducement to commit fraud as implied with the phrase “FREE ROOF”, you can report it in confidence to DIF here.

IMPORTANTIf you enjoyed this post you’re invited to subscribe for automatic notifications by going to: Enter your email address where indicated. If you’re already on the website at Johnson Strategies, LLC, go to the home page and enter your email address on the right hand side. Remember, you’ll receive an email confirming your acceptance, so…check and clear your spam filter for notifications from Johnson Strategies, LLC. ENJOY





Speak Your Mind