When you, as a property owner, discover water damage in your home or business, your first thought may be to call a water remediation company, contractor, or the like to dry out your home. This can be a costly mistake if you do not choose the right one. There have been an increasing number of homeowners who have unwittingly signed contracts with water remediation companies that require Assignment of Benefits” agreements, and they have ended up paying dearly in more ways than one.

Currently, there is a bill being considered by the Florida House of Representatives, titled HB 909- Property Insurance, that addresses the exploitation of “Assignment of Benefits.” Assignment of Benefits originated in medical billing, wandered into Personal Injury Protection and is now intimidating far too many unknowing homeowners into “assigning” away their rights to negotiate and adjust a loss. To put it plainly, Assignment of Benefits allows contractors, loss remediation entities, emergency water extraction companies and the like, to take control of the homeowner’s claim, permitting the contractor or water extractor to collect your claim settlement funds directly from your insurance company. That is, only IF you, the homeowner, sign the appropriate forms and consent to the work in the first place.

So what exactly can signing an Assignment of Benefits eventually result in, other than you losing control of the claims process and giving the water extraction company the power to collect? Signing documents with an Assignment of Benefits agreement could also mean having to pay amounts beyond what is covered in your policy. In addition, the contractor could place a lien on your home, and contractor liens in Florida can be enforced by foreclosure.

But the bigger picture is how Assignment of Benefits and other insurance fraud is causing insurance costs in general to rise and premiums to go through the roof. Many of the water remediation companies that require Assignment of Benefits end up suing the insurer to force payment of ridiculously inflated bills; ie., charging $20,000 for extraction, when a comparable estimate for a 1500 sq. ft. house runs about $3,500. When this happens, insurance companies are forced to pay extraordinary attorney fees and court costs, and they offset those costs by raising premiums for their insured. The more Assignment of Benefits and insurance fraud there is, the more we all pay!

Take Aways:

• DO NOT choose a contractor, loss remediation entity, or emergency water extraction company that forces you to sign an Assignment of Benefits.
• DO NOT sign any contract documents or forms with any language you do not fully understand.
• When in doubt, call your insurance agent for an explanation and advice.

Joe Taylor Restoration does not use Assignment of Benefits- it is not part of the contract we sign with the property owner. As a preferred vendor for over 30 insurance carriers in Florida, we are not part of the problem, causing insurance costs to rise because of fraudulent activity. We are part of the solution.