Florida Regulator Report Shows AOB Abuse Worsening Statewide

A new report from the Florida Office of Insurance Regulation (OIR) says that the Assignment of Benefits (AOB) abuse that has been going on in Florida for several years is only getting worse.

According to the most recent OIR data concerning homeowner claims that involved roof and water damage, the frequency of water claims per 1,000 policies has gone up 44% since 2015 and the severity of damage has increased by 18%.

The latest report was released in early January and analyzed data from 144,983 water claims from the top 25 insurance companies in 2015.

According to the report, Southeast Florida has the highest frequency of water loss claims and in that region there has been a 60% increase in water loss claim frequency over the two-year period that the report examined.

However, the highest combined change in both frequency and severity of claims happened in central West Florida which saw a 35% increase in claims severity between 2015 and 2017.

According to experts, this underscores exactly how AOB fraud is spreading from South Florida to other parts of the state. The report also showed that every region of Florida has experienced large increases when it comes to water loss claims.

When a water loss claim was combined with an Assignment of Benefits the severity of the claim was often 85% more than claims that did not involve an AOB. The report found that since 2015, Assignment of Benefits have increased from 12.8% of water damage claims to 17%.

The report came to the conclusion that the increase in both the frequency and severity of water loss claims and the continued use of Assignments of Benefits over the last several years is “resulting in tangible consumer harm.”

The report stated, “Absent any intervening changes in the way AOBs are being used today, it is expected that these trends will continue to deteriorate.”

David Altmaier, the Florida Insurance Commissioner used the release of this report to call upon lawmakers to pass reform during the 2018 Florida Legislative Session.

He said, “Without a legislative remedy, this problem will lead to an increase in homeowners insurance premiums and lack of consumer choice as insurers stop writing or renewing policies in areas with high water losses.”