Bill aimed at South Florida water claims targets
Article Courtesy of The Palm Beach Post
January 31, 2016
A Florida House panel on Monday passed the latest
attempt to turn off the faucet on what insurers say are costly and
growing abuses, particularly in South Florida water claims.
Insurers say that can happen when contractors and other third parties
get homeowners — often harried and just wanting to get repairs started —
to sign over control of insurance benefits for, say, water damage from a
But contractors, attorneys and others paint a different picture, saying
that insurers want to low-ball consumers and restrict their rights.
The chief risk officer of state-run Citizens Property Insurance Property
Corp. warned of “impending financial catastrophe” if lawmakers failed to
take action on practices that can raise the cost of claims two to four
times. That is pushing rates up when they should be going down in
Miami-Dade, Broward and Palm Beach counties, John Rollins said.
“Assignment of benefit” contracts are like “gas on a fire” in driving up
costs, Rollins said.
Past efforts to restrict such contracts have deadlocked in the
Legislature and failed in the courts over the past three or four years.
The current bill, HB 1097, does not ban contracts assigning benefits to
a third party but requires notice to the insurer within three days for
claims beyond emergency repairs to prevent further damages. It also
restricts the circumstances in which contractors may place a lien on a
consumer’s home, requires written consumer warnings and gives homeowners
three days to pull out of such contracts.
But the bill is not “balanced,” argued Lee Jacobson, an attorney
representing the Florida Justice Association.
“If you don’t tell the insurance company within 72 hours, your claim is
basically denied,” Jacobson told House members. Yet insurers get 90 days
to pay the first penny, he said.
Several members said they want further changes to the bill, but the
House Insurance and Banking Subcommittee approved the measure sponsored
by Rep. Matt Caldwell, R-North Fort Myers. The Senate Banking and
Insurance Committee is scheduled to consider the Senate version, SB 596,
The House panel also passed another bill, HB 671, that attempts to ban
“referral fees” between parties in such claims.
Florida’s insurance consumer advocate Sha’Ron James and a representative
of the state’s Office of Insurance Regulation expressed support for HB
“Up to now, we have not been able to approve anything,” noted House
insurance Chairman John Wood, R-Winter Haven, saying it’s time to find