Florida House Bill 7065 A Year Later

On April 26th last year, the Florida Governor signed into law Florida House Bill 7065. It was implemented on July 1st, 2019. The aim was to reduce the amount of assignment of benefits agreements that could be signed between entities and insureds. The immediate goal was to prevent the insurance company from abusing the legal system. 

An Assignment of Benefits (AOB) is when the insured signs a contract with a third party, typically a contractor, to act on the insurer’s behalf against the insurance company. This certain bill required a certain language to be included in the assignment of benefits contract.For example, providing timeframes to submit documents, and requiring various conditions to be met for the AOB to be compliant. These changes impact if an AOB company will be paid for its work. 

And what’s been the effect in Florida a year later? The insurance industry promised lower premiums and protection for consumers. Has that happened? 

Cost

Citizens Property Insurance Corporation (CPIC), one of the largest insurance companies in the state and one who has faced the most AOB abuse, reported most of their 44,000 insurers have had premium drops in 2020. 

The Center Square reported different results. Because of Hurricane Irma in 2017 and Hurricane Michael in 2018, homeowners likely had an insurance increase this year. 

The problem is rising reinsurance prices. Because reinsurance means insurance coverage purchases by an insurance carrier. In other words, investor-backed insurance for insurers. So, more policies and more data justifies the rate increase, which varies by county said a consultant. 

Depending on your insurance, Florida homeowners could have seen approximately a $47 monthly increase or a $600 yearly increase.

Cases Drop

The bill blocks third parties from collecting attorney fees. So this limits the maximum fee a court can award AOB cases. 

Within Florida’s courts, there has been a decrease in first property cases filed in 2020. CPIC reported as of November 2019, their caseload dropped by 250 fewer cases a month. From 2008 to 2018, AOB lawsuits increased by over 900%, so this is a definite improvement. 

As an insurer and Floridian, it’s important to pay attention to how COVID-19 will impact these bills and what happens in the next legislative session. 

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