Preparing to leave the state Cabinet at the end of the month, Florida CFO Jeff Atwater said Wednesday that lawmakers need to address an insurance practice that critics argue is driving up homeowners’ rates.
Lawmakers this spring could not agree on changes to the practice known as “assignment of benefits.”
Insurers contend the practice has become riddled with fraud and abuse, particularly in claims for water damage to homes, and is increasing property-insurance costs.
“The Legislature needs to deal with it,” Atwater said.
The issue involves homeowners who need property repairs signing over benefits to contractors, who then pursue payments from insurance companies.
Insurers argue the process has been abused by some contractors and law firms, spurring litigation and higher costs. But contractors and plaintiffs’ attorneys contend the process helps force insurers to properly pay claims.
Even as he called for lawmakers to address the issue, Atwater was careful Wednesday to say that legitimate claims need to be paid, describing the situation as a “balancing act.”
“We never want to harm any individual out there in getting the absolute quick and full coverage they deserve on a claim,” Atwater said. “But the majority of this right now is costing the honest Floridian tremendous pain.”
Atwater, who will leave the Cabinet on June 30 for a job at Florida Atlantic University, made the comments after Insurance Commissioner David Altmaier spoke to Gov. Rick Scott and Cabinet members about the assignment-of-benefits issue.
Altmaier, who unsuccessfully lobbied this spring for the Legislature to pass an assignment-of-benefits bill, said his agency is looking at regulatory steps to address the issue.
“We are going to continue to see homeowners’ insurance companies raise their rates for our consumers in a best-case scenario, and in a worst-case scenario just simply stop offering their products in certain regions of the state,” Altmaier said.
The House in April approved a bill (HB 1421) that would have made a series of changes, in part, to curb litigation about claims. But the Senate did not take up the measure.