Florida homeowners could be in for a financially painful year due to circumstances largely out of their control. An insurance rating company based in Oho has issued warnings that because of the many losses from water damage claims and court rulings, Florida property insurers are facing an “uncertain operating environment”. If necessary, it will reduce the current financial stability grade of A for several Florida companies down to a B, which will put thousands of homeowner policies in jeopardy.
Homeowners with a federally backed mortgage must have property insurance with a grade of A, and anything lower than that could result in the policies being in default. The reason for the market instability is, once again, the abuse of assignment of benefits (AOB), the practice where policyholders requiring home repairs may assign their rights to seek reimbursement from the insurance companies to third-party contractors. These contractors will seek an attorney and file lawsuits against the insurer if their claim is denied or if the payment is reduced. AOB lawsuits in Florida skyrocketed from just over 400 in 2006 to staggering 28,000 last year.
As much as twenty to thirty percent of the Florida market is at risk of being affected by the downgrade in financial ratings. This means some ZIP codes may be reduced to one or two insurers, forcing a re-population of last resort insurer Citizens. Before executing an assignment of rights, seek legal advice. Our office offers free consultations.
This information is provided by Miami insurance attorney Alonso, Perez & Santos, LLP. Our areas of practice include bankruptcy, insurance litigation, debt harassment, credit card defense, foreclosure defense, immigration law, condominium law, business start-ups, and more. Call 305-676-7545 to speak with one of our attorneys and receive a free consultation We look forward to working with you.
This information is provided for educational or informational purposes only and should not be construed as legal advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice.