Security First Insurance Participates in Property Insurance Working Group Sponsored by Florida’s Insurance Consumer Advocate

An economic downturn and Florida’s volatile weather are perfect conditions for roof repair and water restoration scams. To address major issues, including unethical schemes to bilk Florida homeowners of their rights to insurance claim settlement funds, two full-day workshops were held this week in Tallahassee by the Office of the Insurance Consumer Advocate. Melissa Burt DeVriese, general counsel and director at Security First Insurance Company, participated in the workshops.

During the workshops, insurance industry executives cited an increase in the use of Assignment of Benefits agreements.

Assignment of Benefits agreements are commonly used in claims involving water damage and roof repair. Homeowners standing inside their home, ankle-deep in water caused by a roof leak, are more stressed and desperate to begin the restoration process than homeowners who file claims for other types of damage. Typically, roofing contractors looking to defraud homeowners, present an Assignment of Benefits agreement to the homeowner within 72 hours from the time the home is damaged. Accompanying this agreement is the promise to take care of everything—the offer appears too good to be true and homeowners quickly sign documents before they have had a chance to fully read and understand the information.

Language included in assignment of benefits agreements allows the roofing contractor to collect claim settlement funds directly from the insurance company. Signing these documents can be a costly mistake for homeowners and result in significant out-of-pocket expenses to pay for repairs beyond what is covered in the policy. Some cases involve a contractor liens being placed on homes, and in Florida, liens can be enforced by foreclosure.

DeVriese has been a strong advocate of preventing the misuse of Assignment of Benefits agreements. “To better protect consumers, a good solution is to introduce a cooling-off period that provides consumers with additional time to rescind the contract with vendors if they change their mind,” said DeVriese. Homeowners, eager to start the recovery process, sign Assignment of Benefits agreements and roof repair vendors often start the repair work before insurance companies are notified of the damage.

“The abuses that we’ve seen entail consumers standing in a foot of water or with a hole in their roof and they call a contractor and enter an agreement that they are unable to get out of, and in some cases, no work is ever performed or minimal work is done,” DeVriese continued.

Robin Smith Westcott, the state’s insurance consumer advocate, had a very clear message for Floridians, “If you have a claim, your first call after the fire department and 9-1-1, should be to your insurance company to file your claim.” Westcott, also stressed the importance for consumers to be wary of anyone who asks homeowners to sign documents within 72 hours of the damage taking place.

As a result of the workshops, the Office of Insurance Consumer Advocate will publish a report that provides recommendations for addressing each item either administratively or by proposed legislation.

For more information and important steps consumers should take before signing Assignment of Benefits agreements, visit www.SecurityFirstFlorida.com/AOB.