Insurance Commissioner David Altmaier has issued a warning to all Florida homeowners recovering from Tropical Storm Gordon, saying watch what papers you sign.
In a recent statement, Altmaier encourages homeowners who have suffered flood or wind damage to use caution when signing an Assignment of Benefits (AOB) document.
Many Floridians will be presented with a document to sign before any repair work can begin on their homes. This document may contain an AOB, which means the homeowner’s insurance claims rights or policy benefits will be transferred to a third party.
“As Floridians evaluate damages to their homes and property following Tropical Storm Gordon, it is vital they understand exactly what they are signing,” Altmaier said.
“AOB abuse has contributed to rising insurance rates and in some cases, unscrupulous repair expenses. Homeowners are encouraged to review any documents they are asked to sign and use caution when signing an AOB. Consumers can always file a claim directly with their insurance company to maintain control of the rights and benefits provided by their insurance policy when resolving a claim.”
According to the statement, AOB abuse can occur after a restoration professional assesses the damage to the home and encourage the homeowner to sign an AOB. As a result, homeowners give the vendor the right to communicate exclusively with the insurance company as well as negotiate and endorse insurance claim payments. They may also file a lawsuit against the insurance company without the homeowner’s knowledge.
AOB abuse has been a driver for homeowners insurance rates to climb. The following are a few tips to assist homeowners:
- Read your insurance policy and know what your responsibilities are following a loss.
- Contact your insurance company prior to signing any document that may contain an AOB.
- If the homeowner elects to sign the AOB, read everything carefully and do not feel pressured to sign it. Signing an AOB is not your only option.
- Beware of language that allows all proceeds of the claim to be made to anyone other than the homeowner or the homeowner’s mortgage company.
- Do not sign the document if there are any blank spaces.