Commentary: Bill Helps Weed Out Dishonest Contractors Who Misuse Assignment of Benefits Contracts

Sun Sentinel

Originally published by Orlando Sentinel   |   View Story

In my 25 years in the roofing business, I have come across all kinds of contractors.

The good ones follow the rules and comply with the ever-changing state and federal regulations that govern our industry. The not-so-great ones don’t.

Over time, a legal provision known as Assignment of Benefits has emboldened a cottage industry of roofers to abuse the system and take advantage of homeowners and their insurance companies.

It often works like this: A roofing-company employee, typically a salesperson, canvasses neighborhoods after a rain or hail storm, telling homeowners they are entitled to a free roof. They pressure homeowners into signing an Assignment of Benefits contract, known as an AOB, which transfers benefits of the homeowner’s insurance policy to a contractor.

When used appropriately, AOBs can help homeowners get work done quickly without having to pay money upfront. However, when abused, AOBs allow sketchy companies to do unnecessary work or inflate the cost before an insurance company can inspect whether there’s damage or a new roof is needed at all. Then, if the insurer refuses the claim, the contractor files a lawsuit in an attempt to collect.

Unwarranted claims and lawsuits end up costing homeowners in the form of higher insurance premiums and give hardworking, respectable roofing companies a bad name. Especially fueling the situation are one-way attorney fees, which allow attorneys suing insurance companies to collect legal fees if they win, but don’t allow insurance companies to collect legal fees if they prevail. Remove this incentive to sue, and much of the AOB problem goes away.

Homeowners should know that they don’t need to sign an AOB to get roof repairs done and not all roofing contractors use them. However, contractors who properly use AOBs inspect roofs for damage, provide a written estimate and wait for the homeowner’s insurance company to send an adjuster. If the adjuster agrees to the claim amount, the homeowner can submit the claim on his or her own or sign an AOB to have the contractor handle it. Everyone is on the same page, so there are no surprises.

Unfortunately, bad contractors use AOBs to prey on homeowners with the promise of quick, hassle-free repairs. They build false trust with homeowners by saying they are working on roofs throughout the neighborhood. Homeowners stop listening once they hear “free roof’’ and don’t understand what they are signing.

As president of the 780-member Florida Roofing and Sheet Metal Contractors Association, I support Senate Bill 1038 that would curb AOB abuse and put some of these dishonest contractors out of business.

We can no longer allow AOBs to be used as a weapon against good, honest roofers and their customers. We must take action to ensure the greedy action of a few doesn’t hurt the rest of us.

George Ebersold is president of the Florida Roofing and Sheet Metal Contractors Association and general manager for Tom Tanenbaum Roofing Inc. based in Orlando.