After years of battling, Florida legislators passed property insurance reform in April 2019. The act, known as HB 7065, will go into effect for Florida residents soon. This means that the way business is completed will change drastically for policyholders, insurance companies, and for AOB vendor’s as well.
Our goal at Vargas Gonzalez Baldwin Delombard, LLP is to educate you on the changes that will be made once HB 7065 takes effect. Below you’ll find a detailed explanation of what to expect as an AOB vendor through HB 7065. Interested in learning more and talking to our team of partners and attorneys about this new law? We’re hosting an event on Thursday, June 20th, 2019 to help answer any questions you may have.
Before Completing Work
Before completing any work at the home of an insured – be sure that the insured’s policy allows for assignments and does not contain language restricting assignment of benefits.
The Assignment Language
All assignments must contain a cancellation provision that allows a contract to be cancelled by the assignor without penalty or fee upon written notice within the following:
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- 14 days of the execution of the agreement
- At least 30 days after the date work on the property is scheduled to commence, if the assignee has not substantially performed
- At least 30 days after the execution of the agreement, if the agreement does not contain a commencement date and the assignee has not begun substantial work on the property
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All assignments must contain a provision requiring the assignee to indemnify and hold harmless assignor from all liability. (NO MORE LIENS ON PROPERTIES FOR AOB WORK).
Communicating With A Carrier
All assignments must be presented to the carrier within three (3) business days of execution of the assignment; or work has begun, whichever is earlier.
Emergency Services And Its Cap
Emergency Services to mitigate, repair, restore, or protect property must not exceed $3,000.00 or 1% of coverage A limits under such policy.
Obligations Under The Contract
Before filing of any lawsuit, if required by the carrier, the assignee must:
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- Submit to an EUO or Recorded Statement
- Participate in appraisal or other alternative dispute resolution as governed by the policy
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Settlement Offer And Lawsuits Against Carriers
After a pre-suit demand by an AOB vendor, and offer to settle by an insurance carrier, entitlement to attorney’s fees is as follows:
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- If the difference between the judgment obtained by the assignee and the pre-suit settlement offer is:
- Less than 25% of the disputed amount, the carrier is entitled to an award of reasonable fees.
- At least 25% and less than 50% of the disputed amount, no party is entitled to an award of attorney fees.
- At least 50% of the disputed amount, the assignee is entitled to an award of reasonable attorney fees.
- If the difference between the judgment obtained by the assignee and the pre-suit settlement offer is:
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For example, if the insurance company offers $10,000 and the judgment is $5,000, the percentage would be 50% and the assignee would be entitled to fees for their attorney. If that same judgment was $2,500, that’s 25% and NO party would be entitled to fees. Finally, if that same judgment was $2,000, that’s 20% and the insurance company would be entitled to receive fees.
Contact Us
These changes will impact the industry. However, as always, we are here to assist and advise on all changes. If going forward you have any questions or concerns, please feel free to contact us. We’re always here to help.
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