Florida Realtors® applauds Governor DeSantis, Florida Legislature for Assignment of Benefits reform
TALLAHASSEE, Fla., May 24, 2019 /PRNewswire/ -- Florida Realtors®, the state's largest professional trade association with more than 187,000 members, applauds Gov. Ron DeSantis' signing into law bill CS/CS/HB 7065, which establishes important reforms to the Assignment of Benefits (AOB) process.
"The abuse and cost-drivers associated with AOB have been a growing problem that directly impacts the ability of people to maintain the American dream of homeownership," says 2019 Florida Realtors President Eric Sain, a Realtor and district sales manager with Illustrated Properties in Palm Beach. "Thanks to the leadership of Governor Ron DeSantis, Senate President Bill Galvano, House Speaker Jose Oliva, Sen. Doug Broxson and Rep. Bob Rommel, we now have meaningful reform in place to help curb rising insurance premiums while preserving the benefits and intent of the AOB process."
Over the years, some contractors and attorneys have abused the AOB process by overcharging for repairs and suing when insurance carriers refuse to pay. According to the Insurance Information Institute there were roughly 1,300 AOB lawsuits statewide in 2000. That number climbed to more than 79,000 in 2013 and nearly 135,000 through Nov. 9, 2018, a 70% increase in just five years. With the rise in AOB abuse comes higher premiums, as insurers seek to recoup their losses.
"Realtors have been advocating for AOB reform because we are on the front lines of the home-buying process," adds Sain. "Seeing people work hard for their home and then having higher insurance premiums due to this abuse is disheartening. These reforms will go a long way to fixing this problem and helping homeowners throughout Florida."
CS/CS/HB 7065 reforms one-way attorney fees, which is a primary incentive behind AOB abuse. Under the new law, attorney fees are governed by a formula that looks at the difference between a pre-trial settlement offer and final judgement. Depending on the difference between these two figures, the insurer, the assignee or neither could be entitled to recover attorney fees.
All bill provisions become effective on July 1, 2019, except for provisions relating to attorney fees, which became effective when the bill was signed into law.
Florida Realtors® serves as the voice for real estate in Florida. It provides programs, services, continuing education, research and legislative representation to 187,000 members in 52 boards/associations. Florida Realtors® Media Center website is available at http://media.floridarealtors.org.
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SOURCE Florida Realtors