The Florida Legislature just passed a bill that makes significant changes to the assignment of benefits ("AOB") process in Florida. Governor Ron DeSantis stated he will sign the bill into law. The effective date of the bill will be July 1, 2019, meaning that it will apply to assignments executed on or after July 1, 2019.
The bill was passed to address concerns regarding abusive litigation practices by contractors and their lawyers. It also was passed to address concerns that insureds were unwittingly losing control over their insurance rights. The bill is intended to help stabilize insurance premiums that were being driven up by the AOB practice.
The bill allows insurers to offer an insurance policy that restricts an insured’s ability to assign insurance rights. Such a policy must be offered at a reduced premium. The bill also transfers some post-loss obligations to the contractor. One example is an examination under oath.
The bill defines what an assignment agreement is and what must be listed in it for it to be valid. The assignment agreement must warn insureds that they are giving up insurance rights by signing the agreement. The bill gives insureds the right to cancel the agreement under certain circumstances.
The bill requires a contractor to serve the insured and insurer with a notice of intent to file a lawsuit against the insurer. The notice must specify the damages in dispute, the amount claimed, and make a settlement demand. The contractor must also provide a detailed written invoice along with information on equipment, materials, supplies, the number of labor hours, and proof that the work was performed in accordance with accepted industry standards.
The bill changes a contractor’s ability to collect attorney fees in litigation. Currently, a contractor can recover all its attorney fees so long as the contractor makes any recovery. Under the bill, a contractor’s ability to recover attorney fees is determined based on a comparison of the pre-suit offer and demand against the ultimate judgment in the case.
