House Workshop on Assignment of Benefits Today
The House Insurance Committee will hold a workshop at 4:00 today on the assignment of benefits issue. This issue has attracted attention as one of the leading causes of upward pressure on homeowners insurance rates even when reinsurance costs have been declining and Florida has enjoyed a long run of hurricane-free years. An assignment of benefits occurs when a policyholder suffers a loss and assigns the right to recovery to a third-party vendor. This vendor bills the insurance company directly, and in some cases charges more than the insurer believes the services should have cost. Under the assignment, the vendor receives the policyholder’s one-way right to attorneys’ fees. The insurer therefore is faced with a potential or actual suit by a commercial party with which the insurer never directly contracted. Ultimately, when insurers are faced with increased claims costs in these circumstances, the costs are borne by the insurance-buying public as a whole.