Homeowner’s bill of rights was drafted previously from Florida’s insurance consumer advocate’s office. The main concern of Jeff Atwater, Florida’s Chief Financial Officer, was to get it approved.
According to Atwater, Florida homeowner’s bill of rights is very important. It should be passed because there are almost 350,000 homeowners in Florida who file their claims annually. Most of the time, Atwater’s office gets 125,000 phone calls straight from different policyholders. Those policyholders call his office just to look for the right answer on their claims. Other policyholders call up to file some of their insurance complaints.
The passage of claims section in the homeowner’s bill of rights made few satisfied when lawmakers codified the recent law. The outcome even resulted in raising some contentious issues. This controversy involved the practice that allows contractors to claim insurance payments on behalf of the homeowners.
Purpose of Florida homeowner’s bill of rights
Florida’s bill of rights will inform the homeowners about their rights and duties when placing their claims with the insurance companies. It is presumed that the homeowners have strong confidence to receive fair treatment about their insurance claims.
This bill purposely informs the homeowners about the timeframe that requires insurance companies to accept the homeowner’s claim—within the period of two weeks. In addition to this, the insurance companies should settle the covered claim within one month of getting a statement on the proof of loss. Confirmation of the claim is done whether it’s denied or partly covered.
Florida homeowner’s bill of rights will also inform homeowners what must be done if there are issues about home damages. It also advises them to immediately get in touch with their insurance company before getting the services of a new contractor.
Steve Burgess, Insurance Consumer Advocate, says that the objective of the bill of rights is to give updates to homeowners regarding two things: their insurance claims and the process of fixing their property. The expected outcome will be for policyholders to have better control of their expected claims. According to Burgess, not all people will use the bill of rights but a huge group will get empowerment and become less troubled.
Usual assignment of benefit claims
The assignment of benefits can involve thousands of fact patterns same as this:
- Plumber repairs – a plumber can be called by a homeowner to do water leak fixing;
- Referral – the plumber inspects the water leak and asks the homeowner to contact a repair company to do the repairs;
- (AOB) Assignment of benefits – this is in exchange of performing repairs at no cost or small cost, on the part of the homeowner. The repair company will ask the homeowner for the right to claim the amount from the insurance company.
- Damages dispute – the insurance company and the repair company can disagree about the repair cost. The difference may be as small as $500 or as much as $50,000.00.
- Lawsuit – the repair company files charges on the insurance company and demands for the right payment, including the payments for the lawyer’s fees and other costs incurred.
This looks like a sensible process. For the last few years, the claims have climbed sharply without objective justification.
The controversy about homeowner’s bill of rights
Although Atwater and his supporters presumed the success of Florida’s bill of rights, there were those who joined in constructing the bill but later on withdrew from it. They felt frustrated about the result which did not allow homeowners to get the new legal rights. What seemed to be a non-controversial issue before has become a great dispute because of the provision of the assignment of benefits.
The contractor supports the homeowner’s right to make a dispute about the claim by filing a case against the insurance company. If the contractor succeeds in the court, this will give fees to the contractor’s legal bill, aside from the insurance claim that should be paid.
From the perspective of the insurance companies, the contractors and the trial attorneys work together in maximizing the funds and duties they can get from the insurance companies—no matter what the amount of the claim is.
According to Michael Carlson, Executive Director of Personal Insurance Federation (PIF) of Florida, there is a basis for the support given by his association which removes the assignment of benefits. That is to present contractors from taking out the benefits that can be claimed by the homeowners.
What is being eyed in the new benefits is the contractors’ dishonesty. Those contractors can request homeowners to lose their rights when they sign an agreement to do some house repairing. After which, the claims will be expanded, telling the insurance company they owe the contractor the cost of repair and the insurer will be charged if they don’t pay.
Aside from the growing costs of claims and the needless legal process, the assignment of benefits will continue to give problems during the process. The policyholders, for instance, may have some legal charges on their behalf and they may not even know it.
Cam Fentriss, Legislative Counsel of Florida Roofers, Sheet Metal & Air Condition Contractors Association (FRSA), stated that FRSA agrees with the changes in the assignment of benefits. Fentriss commented that it’s better to combine both the property owner and the contractor as co-payees in order for them to agree on the amount prior to cashing the claim check.
As a result of the dispute about the provision of assignment of benefits, the entire homeowner’s bill of rights is endangered. The lawgivers ratified a bill of rights that has a minor change in restructuring the law. It is even more difficult to modify some things rather than keeping the current condition.
One of the frustrated officials is Executive Director Jay Neal, from Florida’s Association of Insurance Reform. According to him, the bill of rights process is shallow. Considering something as bill of rights needs to be complete and comprehensive. However, Florida’s bill of rights is not.
Burgess recognized that the hard work intended for the bill of rights was not easy although Burgess never loses his hope. According to him, 2015 will be a better year to have another opportunity with regards to the assignment of benefits. It might be a much better case then.
To know more about homeowner’s bill of rights in Florida, please contact us at DMG Insurance and Financial Services, Inc. ( http://www.dmginsurance.com ) at 543 N state Road 7, STE 106, Royal Palm Beach EL, 33411, phone 561 422 7071 , Fax 561 422 7072.