Welcome to the sunny state of Florida, where living in paradise comes with its own set of risks. As beautiful as Florida may be, it is not immune to natural disasters such as hurricanes, flooding, and wildfires. 

That's why having the right insurance coverage is crucial. But it’s a complex world that is facing many challenges and changes. One thing that has come up recently is insurance benefits and the dangers of signing them over to a third party.

While we cover the topic of insurance reforms and crises in Florida in our latest episode, you should be aware of insurance benefits and the effects of signing them over to someone else. Let’s illuminate this so we can understand the impact of insurance reform in Florida! 

Insurance Benefits: What Are They?

Insurance benefits refer to the financial assistance an insurance company provides to cover the cost of a covered loss. For example, if a hurricane damages your home, your insurance company may provide benefits to cover the repair cost. 

These benefits may include payment for damage to property, medical expenses, or liability claims. The type and amount of insurance benefits you receive depend on the terms of your insurance policy.

The Insurance Scam That Rocked Florida

Unfortunately, not all contractors have your best interests at heart. One of the most common scams in Florida involves contractors who offer to repair or replace a homeowner's roof in exchange for the homeowner signing over their insurance benefits. 

This scam is often called "Assignment of Benefits" or AOB. In these cases, the contractor may overcharge for the repairs and pocket the excess funds, leaving you with subpar repairs or an incomplete job.

The Dangers of Signing over Insurance Benefits

How do they get away with this? Many of these companies have an in-house attorney or an attorney to whom they refer the case. And right now, an attorney can charge three times their typical hourly rate on an insurance claim. So if their hourly rate is $500, they get $1,500 for this situation.

This is very dangerous for homeowners because it drives up the cost of the claim. The roofing company that promised to get you a new roof may bring an attorney into the mix, which does nothing but drive the claim up. 

In fact, a typical $12,000 roof claim anywhere in the country, in Florida, that claim, because of the litigation, everything that goes into it, that $12,000 claim averages $35,000 paid out in Florida! This is a significant increase and can cause financial hardship for homeowners who have already suffered damage to their property.

Signing over your insurance benefits to a third party can be risky. First and foremost, it can be challenging to know whether the contractor you're working with is trustworthy. 

If the contractor is not reputable, they may take advantage of you by overcharging for repairs or not completing the work at all. Additionally, if you sign over your insurance benefits, you may lose control over how the funds are used. 

Bottom Line

Florida is facing some unique challenges regarding reform in the insurance market. Due to the circumstances surrounding the Florida insurance market, homeowners are in for some higher costs. 

By understanding the insurance market and things like the dangers of signing over your insurance benefits to a third party, you can protect yourself from fraud. 

But how do you navigate getting the best premiums for yourself? Tune into the latest episode with Ryan Locke and understand the issues Florida faces, why they exist, and how to navigate your insurance like a pro!