Miami Herald: Assignment of Benefits Cabal

Every year, disreputable attorneys and home repair contractors launch an Assignment of Benefits (AOB) “open season” on home insurance policy holders. Consumers, whose homes are damaged by a leaky pipe or storm damage, want quick action by repair contractors to mitigate further damage. Some contractors will not proceed unless the owner completes an “assignment of benefits” agreement with the contractor. If, later there is a disagreement over repair costs, the contractor can engage an attorney who will attempt to settle the case. If the case goes to court and the insurer wins the case, under Florida law, the insurer still pays its legal fees and it cannot recoup fees from the contractor’s attorneys. However, if the contractor’s attorney’s win, the insurers still pays its legal costs and it must pay the contractor’s legal costs. These “one-way” legal fees work to extort the insurance company into quick settlement rather than defend against unreasonable claims.

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