Citizens Property Insurance Corp. is urging its policyholders to call Citizens first to report losses following Hurricane Matthew in order to protect themselves from assignment of benefit (AOB) scams, according to a statement from the company.
“Citizens is ready to assist our policyholders as they begin their recovery from Hurricane Matthew and get their lives back in order,” said Barry Gilway, Citizens president, CEO and executive director. “Our claims representatives are ready to help. All you have to do is call.”
In its warning to its customers, Citizens said, “Unfortunately, unscrupulous contractors and repair companies thrive in the frenzied days following any storm. Policyholders must be wary of unlicensed contractors or deals that sound too good to be true.”
The company said to protect themselves, policyholders who have experienced a loss from the storm should call Citizens first to ensure they stay in control of their claim. Further, Citizens advises policyholders not to sign anything, including an assignment of benefit, before consulting with Citizens or their insurance agent.
“Here’s why. You may be signing away your rights and be left with unfinished repairs or forced to pay a contractor for repairs not covered by your policy. The policy may also place a limit on emergency repairs until Citizens is notified to inspect damage before permanent repairs are made,” the company said.
Many in the industry are concerned that the AOB issue, which has been called an “insurance crisis” by Citizens, will worsen after this storm.
Jeff Grady, executive director of the Florida Association of Insurance Agents (FAIA) said the bulk of claims that do come in will likely be residential, and agents are urging their customers to contact them first. He said the carriers and regulators are “frightfully concerned” of how the AOB problem could spiral after a storm like Matthew.
“Everyone is dreading that AOB fraud is about to be unleashed from the heavy claim volume that is about to be experienced,” he said. “The hucksters are warming up trucks now to canvas neighborhoods – and it’s going to be onslaught, I fear.”
AOB’s are most likely to be offered to policyholders when a contractor is making emergency repairs or when companies come to the door soliciting business. Citizens said policyholders may be told repairs cannot be completed until they have signed an AOB contract, which allows the company to submit the claim and deal directly with Citizens.
The company said Citizens representatives are available 24/7 to handle claims.
More information on the potential pitfalls of assignments of benefits is available on Citizens website.
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