In the wake of the disaster, is very tempting to put everything in someone else’s hands while you try rebuild as much of your life as possible. Whether it’s a fire, flood, or hurricane, your life has been upended and your desire to return your business and your family to a normal routine can be overwhelming. So it can seem like a godsend when you call a contractor and they say to you, “Just sign here and will take care of everything with your insurance company.” What it is that you’re signing is known in the insurance industry as “Assignment of Benefits” and it has turned out to be a costly mistake for Florida homeowners.
What It Means
By signing an assignment of benefits agreement with a contractor before contacting your insurance company, you entitle the contractor to collect your insurance claim settlement directly from the insurance company. In essence you are assigning the right of a third party to file your claim and control the claim process. Some underhanded contractors will even demand that you sign away the entire proceeds of the claim before they begin work, and expense of the job may even exceed the proceeds of the claim. This opens both you and the insurance agency to lawsuits and liens by underhanded Contractors. The insurance company is locked out of investigating the claim and gathering evidence and you are locked into a contract over which you have no control.
In fact, the contractor may be breaking Florida state law 626.854, which defines public adjusters and the prohibitions under which they operate. Emergency Services 24 Inc. was placed under a consent order for doing just that in 2012: the Orlando-based water removal and restoration company had done these very things, but advertised itself as a public adjuster – in essence representing themselves as someone qualified to prepare and file an insurance claim for an insured or third-party claimant. Florida has also recently instituted the Homeowner Claims Bill of Rights to cut down on the rampant scamming and fraud in this industry as detailed in statute 627.7142.
Work with Your Insurance Agent
An insurance agent can be a homeowner’s best friend, especially when you live in a state that has the potential to be a hurricane magnet. Our wild weather, tropical storms, tornadoes, sinkholes, and flooding can be difficult for anyone, but for homeowners directly impacted by such events the trauma can be overwhelming. An experienced insurance agent can guide you through acquiring the coverage you need, and also help you when the odds have not been on your side. While it is tempting to think that any contractor making the offer to deal with your insurance company perhaps means to accelerate restoring your home as quickly as possible, what you’re signing away is the right to control your own insurance claim. Lead an independent insurance agent work with you and your insurance company toward the best outcome without signing away your vital rights.