Category: Sarasota Insurance Litigation Attorney

A new assignment of benefits (AOB) law that came into effect here in Florida in July alters the practice of policyholders assigning third-party claim benefits of an insurance policy and could very well change the insurance litigation landscape in Florida.

The Bill’s Provisions

Prior to now, the combination of this practice with Florida’s one-way attorney fee statute allowed policyholders to recover attorney’s fees from an insurer.  However, the new law that went into effect establishes a number of requirements when it comes to assignment agreement, including:

Purpose & Effect

According to the legislators behind it, the law was passed in response to a decade of “abusive litigation tactics in Florida’s market.” However, the bill has been labeled a “consumer protection measure,” passed in response to a policyholder benefit that has caused higher rates for Florida property owners.

According to some sources, AOB lawsuits have exploded in recent years – especially in South Florida – leading to some insurers to increase rates for most-all of its homeowner’s policyholders to offset litigation expenses. That being said, insurers have also cited the fact that three hurricane seasons in a row have created certain unavoidable obstacles when it comes to elevated insurance rates. In addition, it is important to note that the insurance industry is celebrating this as a legislative victory, and while they expect a reduction in AOB litigation, they do not expect an overall reduction in insurance litigation.