Senate Committee Workshop Demonstrates the Need for Assignment of Benefits (AOB) Reform

Florida Politics

Originally published by Consumer Protection Coalition  |   View Story

Consumers, state leaders provide compelling evidence on impact of AOB abuse

TALLAHASSEE, Fla. (Feb. 4, 2019) – Testimony provided by consumers during today’s Senate Banking and Insurance Committee demonstrates a clear need to pass Assignment of Benefits (AOB) reform to protect consumers from rising insurance costs and abuse brought on by out-of-control litigation, the Consumer Protection Coalition said.

Charles and Wendy Snellgrove of Clearwater shared their first-hand experience with AOB abuse related to repair work done to their home after a small water leak under their kitchen sink. The Snellgroves signed an AOB to repair a leak under their kitchen sink. They thought the¬¬¬¬¬y were authorizing repair work to start but, in fact, were signing over control of their insurance policy to the restoration company. The company proceeded to gut their kitchen and charge their insurance company $26,000 for considerably more work than was necessary.

It turned out the leak was minor and did not justify removing the kitchen but, by then, it was too late. The Snellgroves tried to rescind the contract, but the water remediation company refused and sued them for breach of contract. In the end, it took the Snellgroves more than a year and a half to get their kitchen restored.

“It angers us tremendously that repair companies are using AOB to take advantage of people,’’ Charles Snellgrove said. “No one should have to go through what we did.’’

The consumers’ testimony was part of a workshop spread out over two full committee meetings to discuss AOB as it related to property and auto glass claims. Sen. Doug Broxson, chairman of the Senate B&I committee, has introduced legislation – SB 122 – to address the awarding of attorney fees under insurance policies and contracts, which is fueling AOB abuse. AOB abuse has become a cottage industry for trial attorneys working in cahoots with shady vendors, including home restoration organizations, looking to make a quick buck.

During the workshop held today and Jan. 22, Florida Chief Financial Officer Jimmy Patronis, Insurance Commissioner David Altmaier, and Citizens Property Insurance Corp. President and CEO Barry Gilway said AOB abuse has reached a critical level and must be stopped. Last year, 34,289 water and glass claim AOB lawsuits were filed compared with just 405 in 2006, according the Department of Financial Services.

The CPC, which is spearheaded by the Florida Chamber of Commerce, applauds Broxson and the Senate for their attention to this issue so early in the session and for recognizing the problem. Amid the growing evidence that AOB is impacting the affordability and accessibility of insurance, the CPC is continuing to raise awareness about the dangers of signing an AOB and looks forward to working with Senate and House leaders to bring about much-needed reform on behalf of consumers.

“Floridians have been waiting for more than half a decade for the Legislature to take action on the problem of AOB abuse and rising insurance rates. PIFF thanks Senator Broxson and the committee for laying the groundwork for reform by holding a meaningful, data-driven workshop. One theme emerges from these discussions – we are facing a crisis and the time for action is now,” said Michael Carlson, president and CEO of the Personal Insurance Federation of Florida.

“While Assignment of Benefits was created to ease the burden on Florida homeowners in times of devastation, the unfortunate reality is that these homeowners are ‘victimized’ again because AOBs coupled with the one-way attorney fee statute have created a system rife with abuse. The best way to resolve this issue for consumers is to seek reforms that decouple the attorney fee structure from AOB in Florida,’’ said Liz Reynolds, Regional Vice President of the Southeast for the National Association of Mutual Insurance Companies (NAMIC).

“We commend Chairman Broxson and the Senate Banking & Insurance Committee for discussing the need for AOB reform today,” said Logan McFaddin, regional manager for the American Property Casualty Insurance Association. “Addressing one-way attorney fees will go a long way in reversing the upward trending abuse on the system by trial lawyers teaming up with unscrupulous vendors to take advantage of Florida homeowners and auto policyholders during a time of need.”


The Consumer Protection Coalition is a broad-based group of professionals advocating for reforms to end Assignment of Benefits (AOB) abuse. Members include the Florida Chamber of Commerce, Florida Justice Reform Institute, Florida Roofing and Sheet Metal Contractors Association, Insurance Information Institute, National Association of Mutual Insurance Companies, Personal Insurance Federation of Florida, Property Casualty Insurers Association of America, Safelite Group Inc., Associated Builders and Contractors, Citizens Property Insurance Corp., Council of Property Claims Professionals, Florida Association of Insurance Agents, Florida Bankers Association, Florida Property and Casualty Association, Florida Realtors, Florida Refrigeration and Air Conditioning Contractors Association, Florida Retail Federation, Latin American Association of Insurance Agencies, National Insurance Crime Bureau, Professional Insurance Agents of Florida, Rytech and VetCor Services.