Florida Supreme Court Judges Commit to "AOB" Insurance Battle

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In the midst of political and legal struggles against the practice of insurance known as "benefit assignment", the Florida Supreme Court agreed to look into a closely followed case resulting in water damage caused to a house in St. Lucie County.

The Supreme Court's decision to hear the case could lead to the resolution of a conflict between lower courts over a restriction that insurers attempted to impose on the assignment of their benefits. In somewhat unusual circumstances, lawyers on both sides of the Saint Lucia County case have asked the Supreme Court to take up the case and settle the dispute.

The assignment of benefits, or AOB as it's widely called, has been one of the most controversial insurance issues in the state of Capitol in recent years and should spark a fight when of the 2019 Legislative Session. When assigning benefits, homeowners who need repairs forego the benefits to the contractors, who are ultimately seeking payments from the insurance companies.

Insurers say the process has become fraught with fraud and litigation, driving up insurance rates. On the other hand, subcontractors and litigators argue that the awarding of benefits helps homeowners to hire contractors quickly to repair the damage and compels insurers to pay claims properly.

Much of the controversy has centered on claims for water damage in homes in South Florida, although it also concerns other parts of the state and problems such as claims for damage to the windshield of a car.

The St. Lucie County case involves a lawsuit for breach of contract by Port St. Lucie's Restoration 1 firm against Ark Royal Insurance Co.'s policyholders John and Liza Squitieri, who were severely damaged. and their contract with Liza Squitieri. 1 of Port St. Lucie to carry out clean-up work and award the benefits to the company, according to a decision rendered in September by the fourth district court of appeal.

Ark Royal, however, refused to pay the full amount claimed by the catering company, indicating an insurance contract requiring the approval of Squirteris' husband, wife and mortgage company, PNC Bank, for the benefits to be transferred to the contractor. Restoration 1 sued the insurer for breach of contract, but was dismissed in front of the circuit court and the fourth district court of appeal.

However, the decision of the Fourth District Court of Appeal was inconsistent with a previous decision of the Fifth District Court of Appeal, which also sought to determine whether an insurer could require the approval of the mortgage credit and mortgage companies. all insured persons before the transfer of benefits.

Security First Insurance Co. brought the case to the Fifth District Court of Appeals after the Florida Office of Insurance Regulation rejected a company's proposal to add such restrictions to flight contracts. A panel of the court of appeal confirmed the position of the Office of Insurance Regulation. The Fifth District Court of Appeal also reached a similar conclusion in a subsequent case involving ASI Preferred Insurance Corp.

As is common, the Supreme Court did not explain the reasons why it had agreed to seize the St. Lucia County case. But in the briefs filed in October, the Ark Royal and Restoration 1 lawyers emphasized the need to resolve the conflicts of decisions of the lower courts.

"The same restrictive allocation language is included in each of the policies issued by Ark Royal, Security First Insurance Company and ASI Preferred Insurance Corporation," Restoration 1's lawyers wrote. "As a result, conflicting decisions have a impact on several insurance companies, policyholders and assignees across the state. Thus, this Supreme Court should resolve the conflict and provide unity between the districts to the insureds, the insurers, the mortgagees and the assignees. "

Jim Saunders reports for the Florida News Service."data-reactid =" 22 "> Credit: Robert Kneschke / Shutterstock.com

In the midst of political and legal struggles against the practice of insurance known as "benefit assignment", the Florida Supreme Court agreed to look into a closely followed case resulting in water damage caused to a house in St. Lucie County.

The Supreme Court's decision to hear the case could lead to the resolution of a conflict between lower courts over a restriction that insurers attempted to impose on the assignment of their benefits. In somewhat unusual circumstances, lawyers on both sides of the Saint Lucia County case have asked the Supreme Court to take up the case and settle the dispute.

The assignment of benefits, or AOB as it's widely called, has been one of the most controversial insurance issues in the state of Capitol in recent years and should spark a fight when of the 2019 Legislative Session. When assigning benefits, homeowners who need repairs forego the benefits to the contractors, who are ultimately seeking payments from the insurance companies.

Insurers say the process has become fraught with fraud and litigation, driving up insurance rates. On the other hand, subcontractors and litigators argue that the awarding of benefits helps homeowners to hire contractors quickly to repair the damage and compels insurers to pay claims properly.

Much of the controversy has centered on claims for water damage in homes in South Florida, although it also concerns other parts of the state and problems such as claims for damage to the windshield of a car.

The St. Lucie County case involves a lawsuit for breach of contract by Port St. Lucie's Restoration 1 firm against Ark Royal Insurance Co.'s policyholders John and Liza Squitieri, who were severely damaged. and their contract with Liza Squitieri. 1 of Port St. Lucie to carry out clean-up work and award the benefits to the company, according to a decision rendered in September by the fourth district court of appeal.

Ark Royal, however, refused to pay the full amount claimed by the catering company, indicating an insurance contract requiring the approval of Squirteris' husband, wife and mortgage company, PNC Bank, for the benefits to be transferred to the contractor. Restoration 1 sued the insurer for breach of contract, but was dismissed in front of the circuit court and the fourth district court of appeal.

However, the decision of the Fourth District Court of Appeal was inconsistent with a previous decision of the Fifth District Court of Appeal, which also sought to determine whether an insurer could require the approval of the mortgage credit and mortgage companies. all insured persons before the transfer of benefits.

Security First Insurance Co. brought the case to the Fifth District Court of Appeals after the Florida Office of Insurance Regulation rejected a company's proposal to add such restrictions to flight contracts. A panel of the court of appeal confirmed the position of the Office of Insurance Regulation. The Fifth District Court of Appeal also reached a similar conclusion in a subsequent case involving ASI Preferred Insurance Corp.

As is common, the Supreme Court did not explain the reasons why it had agreed to seize the St. Lucia County case. But in the briefs filed in October, the Ark Royal and Restoration 1 lawyers emphasized the need to resolve the conflicts of decisions of the lower courts.

"The same restrictive allocation language is included in each of the policies issued by Ark Royal, Security First Insurance Company and ASI Preferred Insurance Corporation," Restoration 1's lawyers wrote. "As a result, conflicting decisions have a impact on several insurance companies, policyholders and assignees across the state. Thus, this Supreme Court should resolve the conflict and provide unity between the districts to the insureds, the insurers, the mortgagees and the assignees. "

Jim Saunders reports for the Florida News Service.