Insurance companies that write property risks in Florida are getting in line to request approval from the Office of Insurance Regulation (OIR) for two key policy revisions intended to control losses from a water damage property claim practice called “assignment of benefits.” Many insurers have attributed the rising costs of water claims in Florida to an increase in the use of assignments of benefits (AOBs). This practice occurs primarily in the residential homeowners’ context and involves a situation where, following a water damage event, the insured assigns its rights and benefits under its insurance policy to a third-party contractor or water mitigation company. The water remediation contractor then bills the insurance company directly with rates that often substantially exceed the…
