Florida’s insurance officials are considering moves to rein in assignments after the Legislature again failed to take action. The procedure allows service providers to work directly with an insurer, but some say they’re taking advantage of the system.
Insurance companies are complaining that a procedure called assignment of benefits is going to force them to raise premiums, and a number of state officials have been sympathetic.
“It’s just flying off the chart,” CFO Jeff Atwater says. “And there’s nothing about the age of the home that seems to be involved, nothing about anything other than a few law firms have found a way to make the most of this opportunity with a few contractors.”
The outgoing cabinet member is joining insurance commissioner David Altmaier in urging state lawmakers to take action on the issue. But for a number of years legislation has faltered. 2017 was no exception.
Meanwhile Atwater says the problem—which began with ballooning water claims in South Florida—is only growing.
“It was localized, but it’s not anymore,” he says. “And there are both issues of water, fire—and now windshield.”
“And if you were to look at the data, Seminole County, a particular windshield repair player has done thousands all of the sudden,” he goes on.
“I mean, it’s as if how did every windshield in Seminole County all of the sudden go bad?”
The spike in windshield claims is actually centered in Hillsborough County, which according to the Florida Justice Reform Institute, accounted for more than a third of the state’s windshield litigation last year.
Commissioner Altmaier is weighing changes to claims forms—things like narrowing the definition of emergency mitigation or imposing requirements for notifying an insurer—that he believes could discourage fraud.
“So when we say policy form changes we’re going to continue to look at situations like that that can be clarified or shored up that can address this issue,” Altmaier says, “but at the same time make sure that we don’t unintentionally impact the ability for a consumer to get their claim paid or have the coverage that they need to have.”
State backed property insurer Citizens insurance recently established similar requirements.
Altmaier is quick to point out he wants legislative direction, but he says some abuses are out of control.
“You know, ‘Call this number and get a free roof. Call this number and get a free windshield. Here’s a free steak dinner if you call us and have your windshield repaired,’” he rattles off.
“I think that it’s clear to me based on that information as well as the data we have seen that there are individuals that have recognized that they are in an advantageous position if they get into litigation with an insurance company.”
Altmaier is still working on what his policy changes might look like and he doesn’t have a timeline yet for enacting them.