Water damage and mold are words that no homeowner wants to hear. Luckily, there are types of insurances that can cover such losses. Recently in the news, there has been speculation that insurance claims have spiked and for no good reason at all. The real question is, who decides what a good reason for an insurance claim? We take a look at each piece to this puzzle and analyze whether or not this speculation is one sided, or all facts are being considered.
First, let's examine what constitutes as a good reason to make an insurance claim. Should homeowners only be able to make a claim in the event of a large natural disaster such as a hurricane, or, should they have the freedom to make a claim if they have a plumbing leak that could potentially cause more damage that previously mentioned hurricane? What if the plumbing leak flooded their entire first floor and the hurricane only caused a minor roof leak? These are the factors that should be considered when all parties including the homeowner, insurance company, and contractor, assess damage and decide if a claim should or should not be made.
In the featured video below, News 9 reports on a sudden rise in insurance claims featuring Citizens Property Insurance and highlights a bad experience of one set of homeowners.
The purpose of the Assignment of Benefits (AOB) is to give the homeowner the complete right to choose what contractors work on their home and to ensure repairs and damage control will begin in a timely manner. You would hope it is easy to trust contractors that are presenting homeowners with an AOB, but unless you already have a trusting relationship with them, you really can’t be 100% sure, right? There may be companies that abuse the power of an AOB, but you must not let those companies hinder the reputation of all companies that use an AOB because it is used to benefit the homeowner when they are faced with damage and a claim needs to be made. In any given industry you would assume that there are those who have bad experiences and those who have GREAT experiences. Luckily, there is something homeowners can do to safeguard themselves so they don’t repeat the similar outcome as we saw in the video and that is EDUCATION.
One way to ensure you are not being deceived by your insurance company or contractors when you have water or mold damage to your home, is to understand all factors that are involved when making a claim. These 5 factors are:
· Know your insurance policy
· Know your rights
· Research your contractors
· Get familiar with your state’s insurance claim laws
All homeowners should have a complete print out of their insurance policy in an easily accessible, safe place. Homeowners should also make sure they know their coverages in detail, especially in the case of an emergency. Your rights as a homeowner are very important to also be aware of. This way, you are less likely to be taken advantage of. Before a catastrophe such as water damage, or mold, have a ready-to-dial contractor you already built trust with. Have them input your information into their system so that if and when there is a hurricane or major plumbing leak, you are already in the system and you don’t have to waste time going through that sometimes lengthy process. Also, check your contractors licensing and online reviews. This will give you real life experiences of the company you're choosing to work with and provide you with a sense of security when you know they are properly licensed and insured. Knowing your state’s insurance claim laws can be very helpful not only when you need to make a claim due to damage, but also when you are shopping for your insurance policy. This way, you will know certain limits and regulations related to insurance claims. Document any and all claim related damage of your home. When your home is in tip-top shape, take the before photos. Take photos of ceilings, inside of cabinets, floors, and anywhere you have plumbing. If you find you have mold or water damage, take multiple photos of the damage and date the photos. By following these 5 pieces of advice, you will be more knowledgeable and prepared in the event of water damage and mold related claims.
Remember, knowledge is power and not all contractors are the same. The AOB can be very beneficial to homeowners especially in an emergency situation. For more information, view our blog page and website.
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The Assignment of benefits has been in use for over 100 years. In recent efforts, insurance companies have been trying to eliminate the use of the Assignment of Benefits to alleged “abuse” and “misuse” of the AOB (Assignment of Benefits). We agree that the abuse needs to stop. There are a select few companies and individuals that use the AOB to their benefit and not for the best interest of the clients. We believe the AOB should only be used to benefit homeowners and create a fair playing field for all trusting contractors in our industry.
The use of the Assignment of Benefits ensures that homeowners are able to keep their rights in choosing who their contractors are when dealing with emergency situations (flood, fire, mold). With the elimination of the Assignment of benefits, the insurance companies would be in full control of what company works on a home, how much money is spent, and the time it takes to complete a job. Representatives, lobbyists, and company owners including Richie Kidwell of Air Quality Assessors are working tirelessly to ensure that only just laws are passed and that homeowners and their rights are protected.
In this featured article, Todd Copeland from the Sun Sentinel explains the most recent happenings with the Assignment of Benefits.
Click HERE to view the article.
If you use an Assignment of Benefits contract in residential property losses and are a contractor in the state of Florida, this blog is a great informational resource for you! Currently, there are two industry related bills that are being considered by the Senate to pass right now, both of which could restrict the use of the Assignment of Benefits and could devastate small business owners. In a nutshell, the Assignment of Benefits serves as the same document doctors’ offices use to in order to communicate and invoice your insurance carrier directly. It is also the same document you sign when replacing your windshield. In Florida, it is usually no cost to the policyholder to replace the windshield. They invoice your carrier directly and get paid by the carrier directly. Banning or restricting the use of the Assignment of Benefits contract will have lasting negative effects for the homeowner when faced with an emergency. Right now, the assignment allows a contractor to begin work immediately in order to stop future damages and preserve their property without the headache of paying out of pocket for the whole loss.
There will be a vote on the Hukill bill, regarding 2 things:
1: The Senator Hukill's Bill
2: Senator Simmons Amendment
Senator Simmons Amendment serves the following 3 main components:
1. Essentially limits the use of AOB to only "emergency circumstances".
2. Prohibits directly or indirectly receiving compensation (referral fees).
3. Allows property insurers to change their policies to limit post loss assignability.
Some would argue that Senate Bill 596 is going to limit homeowners' rights and put insurance companies in complete control over who repairs damages in their home, and how much is spent doing so. Yes, every industry needs some sort of regulation to make sure businesses are being held to high standards in work, honesty, and quality. This can sometimes be a touchy subject because no matter where you go, people are subject to getting approached by dishonest sales people, contractors, and companies. Limiting small businesses by giving larger companies control over who their clients use as a service provider is never the right thing to do and will not solve the issue at hand.
Creating a balanced playing field for the larger companies, insurance providers, and small business owners is the fair thing to do. Putting restrictions on the documents small business owners use to relieve the pressure on homeowners can be seen by the public as partial. As a company in the service industry, we want to make sure everyone is able to receive the highest quality of service they desire from whomever they choose. There are no flaws in giving people the choice to do what they feel most comfortable with.
Finding companies who tend to tell homeowners “white lies” to get them to pay for unnecessary services would be the PROPER way to regulate an industry. Sometimes people tend to group a whole service trade by those who do wrong by the freedoms given. Committing fraud to receive a payment is wrong and those are the people who should be penalized, not those who genuinely have the client’s best interest in mind. When we are called on to do a job, we believe taking care of the homeowner’s concerns no matter how big the job may be, and that is the right thing to do.
There have also been claims made in saying that homeowners are being negatively affected by contractors using Assignment of Benefits. It has been proven that there is no evidence of this. The Office of Insurance Regulation's own data has shown only 3 complaints from homeowners over the past three years regarding to the Assignment of Benefits. That is only a tiny fraction of the jobs that actually have existed.
We like to take all sides into consideration when informing the public of what is happening in our industry regarding regulations and new laws. We also want to make sure that every business in our industry is completely taken care of and treated fairly across the board.
Information regarding next week’s events in Tallahassee:
· Banking & Insurance Committee: SB 1248 by Diaz de la Portilla (DLP) is on the agenda to be heard Feb 16th from 1:30 p.m. to 3:30 p.m.
· Judiciary Committee: SB 596 by Senator Hukill is on the agenda to be heard on Feb 16th from 4:00 p.m. to 6:00 p.m.
We will be hosting a committee meeting at 12:00 p.m. on Tuesday February 16 near the capital building. Please feel free to join us. We look forward to informing all of our readers on any and all updates we receive on Senate Bill 596.