With more than 35 years of experience in partnering with property and casualty insurance carriers to provide underwriting support, we’ve been able to add a lot of value by strengthening relationships with insureds. Completing in-person property inspections often allows us to meet face-to-face with insureds. Because we represent the insurance carrier, the insured’s consider our property inspectors to be the face of the insurance provider.
For example, Florida Senate Democrat Gary Farmer recently filed SB 1218 regarding the assignment of benefits for property repair. This bill prohibits insurance policies from prohibiting the post-loss assignment of benefits.
With profitability being a key focus for insurance carriers in 2017, insurance carriers need to be aware of what SB 1218 entails. A challenge that insurance carriers have long been dealing with is when insureds use an Assignment of Benefits (AOB) instead of contacting the insurance carrier directly about a loss.
An AOB is a legal document that entitles the vendor completing work on the property (plumber, general contractor, electrician, etc) to essentially stand in the property owner’s shoes and bill the insurance carrier directly for services provided. In other words, when an insured signs an AOB, he or she is transferring their interest in the claim over over to the vendor.
The danger with an AOB is that the vendor can demand any amount from the insurance carrier, which bleeds cash and profitability. In the event that the insurance carrier does not agree with the amount, the vendor can take legal action without the consent of the homeowner.
Once an AOB is signed by the insured, the vendor will be paid by the insurance carrier, even if the insured is not satisfied with the work completed. All in all, an AOB leaves the insured with very little control over the insurance claim.
Many property owners are not aware of the risks associated with an AOB. Because our property inspectors at Insurance Risk Services are in communication with insureds, we direct them to the insurance carrier instead of going the AOB route to prevent vendors from bleeding cash from the carriers.
Staying current on law changes as they pertain to the insurance industry is just one of the ways that we provide value to the carriers that we partner with. Please contact us at Insurance Risk Services to learn more about how we can help you to protect your bottom line.