A vast scam engineered by unscrupulous attorneys and contractors is sending homeowners’ insurance premiums skyrocketing, and Florida lawmakers aren’t doing enough to stop it.

The problem stems from a provision in Florida law called Assignment of Benefits (AOB). An AOB allows an insurance policyholder to grant insurance claim rights to a third-party, such as a contractor, to expedite the billing process. The contractor is able to get paid by the insurance company directly after making repairs. But while many homeowners don’t realize it, these agreements are being used by some attorneys and contractors to take control of a homeowner’s policy, inflate a claim, then sue an insurance company that disputes the bill.

The abuse epidemic is further compounded by Florida’s outdated rules on one-way attorney fees. According to these rules, if the contractor wins the lawsuit, the insurance company must not only pay its own legal fees, but those of the contractor as well. If the insurance company wins, there is no reimbursement of fees. As a result, insurers are motivated to settle lawsuits and pay exorbitant claims, which translate to higher premiums for consumers.

There are numerous incidents of Florida homeowners being victimized by dishonest contractors using AOB provisions to enrich themselves. When Natalie Kreiter discovered a small leak in her kitchen, a plumber advised her to hire a water mitigation company to repair it. The company told her that the water damage was covered by her insurance policy and asked her to sign an AOB form, which she did. The company then tore apart her kitchen and failed to make the necessary repairs. Despite that fact, Kreiter’s insurance company had no choice but to issue the payment directly to the company.

Similar stories abound. But despite the well-documented and widespread misuse of AOB, the Florida Legislature has yet to address this growing problem.

Enabled by legislative inaction, AOB abuse has surged over the last decade. In 2016, more than 28,000 AOB lawsuits were filed in Florida, up from just 405 in 2007. The problem is so rampant that the American Tort Reform Association named Florida the nation’s top “judicial hellhole” in 2017.

According to Florida’s Office of Insurance Regulation (OIR), the abuse is only getting worse. A review of homeowners’ claims closed between January 1, 2015, and June 30, 2017, revealed that the number of water damage claims increased 44 percent and the severity of claims increased by 18 percent over that short period.

AOB abuse comes at a cost for all Florida policyholders. As insurance companies face rising legal expenses with no end in sight, they are being forced to increase premiums on their customers. The Florida Chamber of Commerce reports rate increases as high as 10 to 15 percent.

A few obstructionist legislators have repeatedly stymied efforts to pass common-sense legislation that would end the abuse and restore fairness and stability to Florida’s insurance markets. The Florida Senate recently refused to approve a bill to fix this loophole, which could lead to premium spikes of 25 percent. Floridians deserve better. Consumers don’t want legislators to ignore this problem any longer. The self-serving cabals created by dishonest attorneys and contractors need to be dismantled.

Lawmakers must act quickly to stop this abuse and prevent further harm to Floridians.

Liam Sigaud writes for the American Consumer Institute, a nonprofit educational and research organization. For more information about the Institute, visit www.TheAmericanConsumer.Org.