The battle over whether a homeowner can assign insurance benefits to your restoration company following a loss has taken an unexpected turn. The law in Florida is now divided.
Who holds the upper hand in legal arguments over whether a policyholder can choose your company to do clean-up and repairs and file the claim? Will you get paid for your work or does an insurance company have a legitimate way to avoid paying your bill? That answer depends on the county you work in and the Insurance Policy the homeowner has.
Many years ago, several insurance companies inserted language that required all insured parties and the mortgage lenders named in the policy to sign the AOB in order for it to be enforceable. That set off legal challenges, in the 4th District Court of Appeals (DCA) (Broward and Palm Beach County). Even though getting your mortgage company to sign an AOB is virtually impossible that court ruled the restriction was reasonable and enforceable.
The other case was in front of the 5th DCA (Central Florida). The Florida Office of Insurance Regulation (OIR) in recent years has disallowed this language and restricted the language from being added to the policy. The Insurance Company that was disallowed from using the language in question sued the OIR and lost. The 5th DCA upheld the OIR position that the language in question is against current Florida law.
For now, policyholders and mortgage holders in the southeastern part of the state (except Miami-Dade and Monroe counties), in order for an AOB to be enforceable, it must have the mortgage company(s) sign off on the AOB (if the policy requires it). AOB contractors should be aware that surplus lines policies (Lloyds of London, GeoVera, etc…) don’t need language approval for their policies or from the OIR, because policies change every year, the language could be snuck in.
In the coming months or years the Florida Supreme Court will likely weigh in on the issue and settle it once and for all. Until then, given the uncertainty, restoration companies need to take these steps:
Read the policy with the homeowner. Does it require that all insured parties and the home lender sign the AOB when a loss has occurred? If yes, then if you live in or around Palm Beach or Broward County, everybody’s signatures may be required.
Contact a lawyer. A law firm that specializes in representing restoration companies can guide you on how to file claims and preserve your rights in court.
