When your home suffers damage from a storm, fire, or other covered event, dealing with insurance claims can feel overwhelming. A contractor might approach you with a helpful solution: signing an Assignment of Benefits (AOB) that lets them handle everything for you. While this might sound convenient, Florida’s Assignment of Benefits system can strip away your control and potentially cost you thousands of dollars.
Understanding what an AOB really means for your damage claims — and why consulting an attorney is a smarter choice — could save you from financial disaster and lengthy legal battles. The convenience of letting someone else handle your claim often comes at a price that’s far steeper than most homeowners realize. The damage claims attorneys at EC Law Counsel can explain how this system may try to take advantage of you.
What is an Assignment of Benefits (AOB)?
An Assignment of Benefits is a legal document that transfers your insurance policy rights to a third party, typically a contractor or service provider. When you sign an AOB for damage claims, you’re essentially giving that party the authority to act on your behalf in all matters related to your insurance claim.
This document allows the assignee to communicate directly with your insurance company, make repair decisions, negotiate settlement amounts, and receive insurance payments. Most importantly, it gives them the legal right to sue your insurance company if they disagree with coverage decisions or payment amounts.
In Florida, AOBs became particularly common after major hurricanes and storms, when contractors would approach homeowners offering to streamline the repair process. What many homeowners didn’t realize was the extent of control they were surrendering.
How an AOB Works in Florida Damage Claims
The process typically begins when a contractor offers to handle your insurance claim after assessing damage to your property. They present the AOB as a way to eliminate hassle — you won’t need to deal with insurance adjusters, paperwork, or payment delays.
Once signed, the contractor takes over your claim entirely. They inspect the damage, prepare estimates, communicate with your insurance company, and negotiate the settlement. The insurance company then sends payments directly to the contractor rather than to you.
This arrangement might seem beneficial initially. The contractor handles all communication, potentially expedites repairs, and appears to remove the burden of navigating insurance processes. However, this convenience comes with significant risks that many homeowners discover too late.
The Risks of Signing an AOB
1. Loss of Control Over Your Claim
The most immediate consequence of signing an assignment of benefits is losing control over your own insurance claim. You can no longer communicate directly with your insurance company about the claim, make decisions about repair methods or materials, or negotiate settlement amounts.
This loss of control extends to every aspect of the claims process. You might find that repairs are being done differently than you expected, with materials you didn’t choose, or on a timeline that doesn’t work for your family. Since the contractor now has the legal authority to make these decisions, your preferences may be ignored.
2. Potential for Inflated Costs and Fraud
Unscrupulous contractors have been known to exploit the AOB system by inflating repair costs far beyond reasonable market rates. Since they’re dealing directly with the insurance company and you’re removed from the negotiation process, there’s little oversight on the costs being claimed.
Some contractors may charge for work that wasn’t performed, use substandard materials while billing for premium ones, or expand the scope of work beyond what’s necessary. When insurance companies discover these practices, they often deny claims entirely, leaving homeowners without coverage for legitimate damages.
The Florida legislature has acknowledged this problem, with inflated AOB claims contributing to rising insurance premiums across the state. Insurance companies have reported billions in fraudulent or inflated AOB-related claims over recent years.
3. Risk of Litigation
One of the most dangerous aspects of AOBs is that they give contractors the right to sue your insurance company. While this might seem like the contractor’s problem, policyholders often get dragged into expensive litigation.
If the insurance company disputes the contractor’s charges or denies the claim, the contractor can file a lawsuit. As the policyholder, you may be required to participate in this litigation, potentially facing legal fees and court costs. Even worse, if the lawsuit is unsuccessful, you might still be responsible for paying the contractor for work performed.
This litigation risk has led to a dramatic increase in insurance-related lawsuits in Florida, with AOB disputes comprising a significant portion of these cases.
Why Contacting an Attorney Is a Better Alternative
1. Protecting Your Rights and Interests
Our experienced attorneys understand insurance law and can protect your rights throughout the claims process. Unlike contractors who profit from inflated claims, attorneys work to ensure you receive fair compensation for your actual damages while maintaining control over your claim.
Attorneys can review your policy, assess the damage, and advise you on the true value of your claim. They can also identify potential coverage issues before they become problems and ensure that you’re not signing away rights unnecessarily.
2. Negotiating with Insurance Companies
Insurance companies have teams of lawyers and adjusters working to minimize claim payouts. Having your own legal representation levels the playing field. An attorney experienced in damage claims knows the tactics insurance companies use and can negotiate effectively on your behalf.
Your attorney can also ensure that all damages are properly documented and claimed, including damages that might not be immediately obvious. This thorough approach often results in higher settlements than homeowners achieve on their own.
3. Understanding Policy Language and Coverage
Insurance policies are complex legal documents filled with technical language that can be difficult to interpret. An attorney can explain your coverage, identify exclusions that might affect your claim, and ensure you’re taking advantage of all available benefits.
They can also spot policy violations by the insurance company, such as failing to investigate claims properly or denying coverage without proper justification.
4. Ensuring Fair and Accurate Claim Resolution
With legal representation, you maintain control over your claim while having professional advocacy. Your attorney works for you, not for contractors or insurance companies, ensuring that your interests remain the primary focus throughout the process.
This approach typically results in more accurate damage assessments, fair repair estimates, and settlements that truly cover your losses rather than inflated amounts that might trigger claim denials.
Keep the Benefits You Deserve: Contact an Attorney Today
Florida’s Assignment of Benefits system might promise convenience, but it often delivers complications, inflated costs, and loss of control over your own property damage claim. The risks of signing an AOB — from fraudulent contractors to expensive litigation — far outweigh any perceived benefits.
Instead of surrendering your rights to a contractor, protect yourself by consulting with an experienced attorney at EC Law Counsel with experience in insurance claims. An attorney will ensure you receive fair compensation while maintaining control over the repair process and protecting your financial interests.
Contact us today to discuss your damage claim and learn how legal representation can help you navigate the insurance process while keeping the benefits you deserve. Your home and your financial future are too important to leave in the hands of contractors who profit from your claim.
