• Home
  • About Us
    • Our History & Accomplishments
    • Our Leader
    • LMA Gives
    • Photo Gallery
    • Library & Resources
  • Services
    • Assignment of Benefits & Insurance Litigation
    • Associations & Nonprofits
    • Business Development & Procurement
    • Education
    • Energy & Environment
    • Emergency Management
    • Flood Insurance & Resilience
    • Healthcare
    • Insurance/Financial Services
    • Legislative & Regulatory Monitoring
    • Marketing Intelligence
    • Property & Casualty Insurance
    • Public Relations
  • News / Podcasts / Library
  • Contact
  • Home
  • About Us
    • Our History & Accomplishments
    • Our Leader
    • LMA Gives
    • Photo Gallery
    • Library & Resources
  • Services
    • Assignment of Benefits & Insurance Litigation
    • Associations & Nonprofits
    • Business Development & Procurement
    • Education
    • Energy & Environment
    • Emergency Management
    • Flood Insurance & Resilience
    • Healthcare
    • Insurance/Financial Services
    • Legislative & Regulatory Monitoring
    • Marketing Intelligence
    • Property & Casualty Insurance
    • Public Relations
  • News / Podcasts / Library
  • Contact
  • MENU

AOB Lawsuits Continue Meteoric Rise

SHARE THIS

One-way attorney fees law blamed

The latest figures show the number of Assignment of Benefits (AOB) lawsuits continue to rise in Florida, up 18% in 2018 from the year prior – and up 900% from 2008.  Despite the increase, the troublesome lawsuits remain concentrated within a disproportionately small number of lawyers and firms, utilizing a loophole in the state’s one-way attorney fees law.

The updated report by the Florida Justice Reform Institute uses data from the Florida Department of Financial Services’ Service of Process database, updated through 2018.  It shows for the eighth year in a row, AOB lawsuits made up more than half of all litigation filed against insurance companies.  From 2008 to 2018, AOB lawsuits increased by over 900%, while total lawsuits in that same period increased just over 400%.

“This lawsuit-for-profit scheme has become an incentive for trial lawyers and their vendor clients – often water damage remediation firms or auto glass shops with aggressive marketing schemes,” notes the report.

Five firms, comprising of six attorneys, filed more than 20% of all property AOB lawsuits.  The concentration is even worse in auto glass cases, where nine firms, comprising of just 12 attorneys, filed nearly 85% of all AOB auto glass cases.  The Institute says the driver of these growing lawsuits is Florida’s one-way attorney fee statute (627.428 F.S.), which the Florida Legislature has bills addressing this session (see this edition’s Bill Watch).

“Despite the statute’s plain text—which describes awards in favor of named insureds, named beneficiaries, and omnibus insureds— and Florida cases describing it as a benefit for policyholders, courts have extended it beyond these categories of individuals. This has caused significant distortions in the insurance marketplace and significant costs for premium payers, all for the benefit of a very few number of attorneys,” the report stated.

In a troubling development, some lawyers are also setting up their own repair businesses, so they can profit from both the abuse and the lawsuits, according to the Institute.

AOB abuse and increased litigation were cited last week by Citizens Property Insurance Corporation as part of the reason it’s seeking $200 million in traditional reinsurance coverage for the upcoming hurricane season.  Those factors, along with Hurricanes Irma and Michael and non-weather water loss claims, created a $135.9 million net operating loss last year in the personal lines account of Florida’s insurer of last resort.

CFO Jennifer Montero told the Citizens Board last week that the reinsurance will reduce the personal lines surplus exposure from 62% to 52% in the event of a one-in-100 year storm.  It’s part of Citizens’ $1.6 billion risk transfer package for the 2019 storm season.

LMA Newsletter of 4-1-19

SHARE THIS

Tags: AOB, Assignment of Benefits, Citizens Property Insurance Corporation, Florida Justice Reform Institute, Insurance Litigation

“Thank you Lisa for staying on top of, as well as advocating, for Florida residents and legislative reform. Your newsletters are very informative and enjoy reading the points of view.”  

Shawna Miller, Sr. Claims Quality Assurance & Compliance Manager
Florida Peninsula Insurance Company
Jacksonville, FL

“Lisa Miller is a true champion for the insurance industry, with her regular updates! We appreciate all you do and keeping us up to date on priority issues!”

Gillian Lloyd, Account Executive
Zywave
Milwaukee, WI

“Just a quick note to let you know how much I have appreciated your newsletter over the years and the assistance they offer for those in the field of claims. We depend on the information more than you will ever know!”

Laurie Rasberry, Chief Claims Officer
Acorn Claims
Prosper, Texas

“Your newsletter is fabulous!  I greatly appreciate the topics you expose, so that insurance professionals like myself can keep up with the latest events that affect the public we serve and ourselves.”

Cynthia Hoehn, Independent Property & Casualty Personal Lines insurance agent
Clermont, FL

“Lisa this is another great newsletter, and we appreciate the time and energy you put into these informative updates – you are on top of these topics!”

Mike Graham, CEO
Smart Vent Products, Floodproofing.com, & Risk Reduction Plus
Juno Beach, FL

“Great article on Risk Rating 2.0!”

Austin Perez, Senior Policy Representative for Federal Housing, Valuation, Insurance and Commercial Issues
National Association of Realtors
Washington, D.C.

“Just wanted to say that I thoroughly love your newsletter. It’s is always informative and insightful to the ins and outs of our industry.  You are an inspiration and an important asset in the insurance world.  Keep up the great work!” 

Cynthia Scott, President
University Insurance Group
Davie, FL

“I have followed your weekly newsletter and podcasts and now have a full appreciation for what you bring to this industry.  You are an inspiring force, plain and simple.  I wanted you to know that you make a difference.  Thank you for all you do!”

Jeffrey Karam, CPCU
Bradenton, FL

“Another great Newsletter on Florida industry this week.  Your service and advocacy in Florida is very important to keeping me updated and apprised of the Florida insurance laws, trends and overall environment.  Something similar is very much needed in Louisiana, too.”

Jennifer Tedesco, Esq., Claims Director
Pharos Claims Services
Orlando, FL

GET THE LATEST UPDATES IN YOUR INBOX FOR FREE!

SUBSCRIBE NOW

READ THE LATEST LMA NEWSLETTER ONLINE NOW

READ NOW

331 N. Monroe Street
Tallahassee, FL 32301
(850) 222-1041
[email protected]

*DBE certified through affiliate Lisa Miller Consultants

© Copyright 2008 - 2023
Lisa Miller Associates
All Rights Reserved
Managed by SiteBolts