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Originally Posted by ouicestmoi
Mike... The Florida roofing scam often involves contractors showing up after a major storm and offering homeowners a “free” roof replacement. Here’s how it usually goes down:
1. Initial Pitch: A contractor knocks on the door and tells the homeowner that their roof likely has damage from the storm and they can get a brand-new roof at no cost. They might even claim that insurance will fully cover it.
2. Fake Inspection: The contractor will "inspect" the roof and may even cause damage themselves or exaggerate any minor issues.
3. Assignment of Benefits (AOB): The contractor convinces the homeowner to sign an “Assignment of Benefits” form. This transfers the homeowner’s insurance rights to the contractor, allowing them to deal directly with the insurance company. In theory, this is supposed to streamline the process—but in practice, it’s often a setup for inflated claims.
4. Inflated Claims: The contractor then submits an inflated claim to the insurance company, sometimes charging for things that weren’t damaged or for unnecessary repairs. If the insurer rejects or questions the claim, the contractor (now with legal standing) might sue them.
5. Lawsuits and Increased Costs: The contractor may take legal action against the insurance company over the claim, which drives up costs. Florida had been notorious for the volume of these lawsuits, leading to higher premiums across the board as insurance companies tried to offset their losses.
Because of the rampant fraud, Florida passed several laws in recent years to crack down on the abuse of AOBs in roofing claims. Homeowners are now advised to be cautious, avoid signing an AOB, and directly involve their insurance company if they suspect storm damage.
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Assignment of Benefits (AOB) by which a homeowner transfers his right to make a claim against his insurer, are now illegal in Florida. This, along with several other new laws, were part of the "reforms" enacted by the Legislature and signed by Governor DeSantis in 2023.
By eliminating AOB's as well as the automatic award of attorney's fees, the legislature has prevented the fraudulent activities of certain roofers and their unscrupulous attorneys in which a roofer would sign up the homeowner; take an AOB; replace the roof before the insurer even knew of the claim; and, file a lawsuit in which the roofer would be paid and the attorney receive a fee award that would exceed the amount awarded the roofer.
Since 2017, because of these fraudulent activities, ten homeowner insurance companies have been forced out of business in Florida, five alone in the worst year, 2022. Several multi-state insurers have pulled out of Florida or severely limited the number of policies they will write in Florida. Every homeowner's insurer in Florida has been forced to raise its premiums by significant amounts.
I'm confident that the reforms enacted by the Legislature will, eventually, restore order to the insurance market in Florida and reduce the premiums or, at least, reduce further increases in the premiums. Unfortunately, this will not happen overnight. For one thing, some of the reforms may not be retroactive, and there are still thousands of pending lawsuits brought by the roofers and their attorney's.