The Consumer Protection Coalition (CPC) spoke before the Florida Senate Committee on Banking and Insurance last week to urge reforms on Assignment of Benefits in this legislative session.
At the hearing, the CPC said abuses to the Assignment of Benefit (AOB) are getting out of control and harming consumers and businesses.
“The data clearly shows that Assignment of Benefits abuse is growing statewide and is driving up costs for policyholders and employers,” said Carolyn Johnson, director of business, economic development and innovation policy for the Florida Chamber of Commerce.
“We are very encouraged that Senator Flores and her committee are looking at this issue and its serious impact on Florida families and businesses.’’
AOB said at the hearing that each time a claim is inflated, policyholders ultimately pay for it in the form of higher premiums. In 2016, the average claim was just over $20,000 – almost twice the average claim amount in 2011.
CPC data states that 45 percent of claims resulted in litigation, up just 12 percent in 2011. Further, 60 percent of those came from 13 law firms.
“This isn’t an issue that we can continue to ignore,’’ said Logan McFaddin, regional manager for the Property Casualty Insurers Association of America, a member of the coalition. “Unfortunately, a few bad players can increase insurance costs for everyone.”
The CPC says this needs to be a top priority for Florida lawmakers.
“We are hopeful that this is finally the year the Legislature takes steps to curb abusive AOB practices and stop unscrupulous vendors who are taking advantage of consumers and putting our state’s insurance market at risk,’’ said coalition member Michael Carlson, president of the Personal Insurance Federation of Florida.