Florida’s Assignment of Benefits Ban: What It Means for You

What an assignment of benefits was

A pipe bursts, and the water company that shows up hands you a form before the fans go in. For years, that form was often an assignment of benefits.

The Florida Department of Financial Services describes an AOB as an agreement that “transfers the insurance claims rights or benefits of your insurance policy to a third party.” It gives that third party authority to file a claim, make repair decisions and collect insurance payments without your involvement. The Office of Insurance Regulation puts it another way: the vendor gets to “stand in the shoes” of the insured.

AOBs were not always misused, and DFS notes they can help some owners. But OIR says abuses drove up costs for homeowners because of unnecessary litigation, and that a consumer could end up involved in the vendor’s lawsuit against the insurer. OIR cites DFS figures of 405 AOB lawsuits across Florida in 2006, rising to 28,200 by 2016. The Legislature tightened the rules in 2019 and later ended new post-loss assignments for policies issued on or after January 1, 2023.

What the ban says

The key sentence is s. 627.7152(13): a policyholder “may not assign, in whole or in part, any post-loss insurance benefit under any residential property insurance policy or under any commercial property insurance policy” as defined in s. 627.0625(1), “issued on or after January 1, 2023.” Any attempt to assign those benefits “is void, invalid, and unenforceable.”

Three exceptions in subsection (11) still apply:

• A transfer to a later buyer of the property who has an insurable interest after the loss.
• A power of attorney under chapter 709 that lets a management company, family member, guardian or similar person act for you on the claim.
• Liability coverage under a property policy.

Two details are easy to miss. First, the statute’s definition of an assignment agreement does not include fees collected by a licensed public adjuster (s. 627.7152(1)(b)). Second, the commercial definition the ban borrows from s. 627.0625(1) leaves out some coverages, including windstorm and flood. Whether the ban reaches a particular commercial policy is a legal question for a Florida attorney.

DFS’s consumer page describes the ban as covering policies “issued or renewed on or after January 1, 2023.” Your declarations page shows your policy period. If you are unsure which rules apply, ask your insurer or agent before you sign anything.

Can your post-loss claim rights be assigned?

Policies issued before 2023

For residential and commercial property policies issued on or after July 1, 2019, and before January 1, 2023, an assignment was allowed only if it met strict rules in s. 627.7152(2). An agreement that misses any of them is invalid and unenforceable. Among other things, it had to:

• Be in writing and signed by you and the company.
• Let you cancel without a penalty or fee by signed written notice within 14 days after signing, or within the later windows the statute sets if work has not substantially started.
• Include a written, itemized, per-unit cost estimate.
• Carry a bold, 18-point notice that you are giving up certain rights under your policy.

Under those older policies, the company could not seek payment from you beyond your deductible, unless you chose extra work at your own expense. In an urgent or emergency situation, the statute also caps what the company can take by assignment under a residential policy, using a formula tied to your Coverage A limit. Separately, s. 627.7153 let insurers sell lower-cost policies that restrict assignment, with a bold notice on the policy.

When a contractor hands you something to sign

Most contractors and mitigation companies want a signed contract before they start, and that is normal. What matters is what the paper does. OIR’s tips before you sign:

• Read your policy and know your duties after a loss.
• Contact your insurance company before signing.
• Read the document carefully, ask questions and do not feel pressured.
• Do not sign a document with blank spaces.

DFS adds that you should make the first contact with your insurer yourself, and that you do not need to sign an AOB to get your claim processed or your home repaired. Be careful with any form that lets the company negotiate with your insurer or endorse claim checks. Under s. 489.147, a contractor may not interpret your policy or adjust your claim unless licensed as a public adjuster. The guide to public adjuster vs. contractor explains who may do what.

What you can still do

The ban changes who holds the claim. It does not take away your choices.

• Hire any licensed contractor under an ordinary repair contract. Ask for the good faith, itemized estimate Florida law requires before you sign an agreement authorizing repairs under a claim (s. 489.147).
• Report the claim yourself and keep the decisions about repairs and settlement in your hands.
• Make temporary repairs to stop more damage, and keep receipts. See temporary vs. permanent repairs.
• Get claim help from a licensed public adjuster, if the loss is large or disputed. On residential claims, the adjuster may not take authority to choose who does your repairs (s. 626.854(18)).

If you already signed an assignment on a newer policy, the statute says it is void, but what that means for any work already done is a question for a Florida attorney. For general questions, the DFS Insurance Consumer Helpline is 1-877-693-5236. Adjusterman is a licensed Florida public adjusting firm; you can read how we work on our process page, or ask for a free claim review on the claim submission page if you are unsure whether you have covered damage. If you are a Citizens policyholder, see Citizens Property Insurance claims.