The AOB wasn’t eliminated because this is a classic example of what economists call “Rent Seeking”. Rent-seeking is an attempt to obtain “economic rent” by manipulating the political environment in which economic activities occur, rather than by creating new wealth. Thus far, the Judicial and Political systems
have been manipulated to transfer wealth from the premium paying public to unprincipled and profligate policyholders, contractors and lawyers. That’s it. Plain and simple, sir. They are gaming the system, a favourite Florida pastime. Should this AOB door be closed, another avenue for manipulated wealth transfer will be found. The perpetrators aren’t going to suddenly find decency and respect in their being. Rotten people do rotten stuff.
AOB has been an open checkbook for fraud – the state should go back and revisit every case for the past 5 years and prosecute the hell out of the adjusters,policy holders, lawyers and ‘clean-up con men’ they can find that even skirted existing insurance laws.
They need to come up with an airtight solution. Just removing the one-way atty fees for an atty suit doesn’t stop the atty from convincing the insured to sue. Further, there should be a time constraint for filing a suit. Gilway said that sometimes their first notice of a claim is a lawsuit being filed. That is ridiculous.
The other side is that an AOB is convenient for the insured in that they don’t have to front the money to the contractor.
Don’t have all the answers but a good start would be to extend or eliminate the 72 hour window to void the AOB. In many cases the insured has signed the AOB not knowing what it means, thinking they are signing it with their own carrier, and wouldn’t sign if they knew the headaches it would cause them. Plus I’d insert language in the laws preventing PA’s and lawyers from reporting the claims well after the AOB was signed.
Not sure of the solution, but I personally know too many people who have been significantly shortchanged by their insurance carrier after a storm having to wait for appeals and having to hire public adjusters because they are offered 25 cents on the dollar for the repair (quoted), that when they have someone coming to them saying they will handle everything, just sign here, they jump at the opportunity.
As a P&C agent in Florida I see this everyday – part of the problem is also that there are many Florida based carriers whose claim culture is to first deny, deny and deny or shortchange a valid claim leaving the customer w/o any options but to do the AOB.
I won’t mention any names (but you know who you are), a simple Google search will show some of these carriers have horrible reviews, some as low as 2 stars. Who in their right mind would buy coverage from a carrier that is rated so low is beyond sanity.
I dealt with one of those here in Texas. This company was recently acquired by Flo. Early on in my appointment two separate customers filed claims, and both customers had to go to the department of insurance to compel them to pay the claims that were clearly covered by the policy (a theft, and a burst pipe). I stopped placing policies with them right away.
Having started my career in claims in Florida, I am continually reminded why I left of my own volition to move to North Carolina, where the claims environment is so much more civilized. First bad faith, then hurricanes, then sinkholes, then AOB, then construction defects… ad nauseum. Lawyers and their lackeys down yonder follow the money. They are going to pull on that teat until they kill the cow.
I’m not sure why AOB isn’t just eliminated. It violates the basic principle of insurable interest.
Mr. Solvent,
The AOB wasn’t eliminated because this is a classic example of what economists call “Rent Seeking”. Rent-seeking is an attempt to obtain “economic rent” by manipulating the political environment in which economic activities occur, rather than by creating new wealth. Thus far, the Judicial and Political systems
have been manipulated to transfer wealth from the premium paying public to unprincipled and profligate policyholders, contractors and lawyers. That’s it. Plain and simple, sir. They are gaming the system, a favourite Florida pastime. Should this AOB door be closed, another avenue for manipulated wealth transfer will be found. The perpetrators aren’t going to suddenly find decency and respect in their being. Rotten people do rotten stuff.
AOB has been an open checkbook for fraud – the state should go back and revisit every case for the past 5 years and prosecute the hell out of the adjusters,policy holders, lawyers and ‘clean-up con men’ they can find that even skirted existing insurance laws.
They need to come up with an airtight solution. Just removing the one-way atty fees for an atty suit doesn’t stop the atty from convincing the insured to sue. Further, there should be a time constraint for filing a suit. Gilway said that sometimes their first notice of a claim is a lawsuit being filed. That is ridiculous.
The other side is that an AOB is convenient for the insured in that they don’t have to front the money to the contractor.
There are many ways to get a job started without using AOB or money out of pocket. Are you in the cleanup business Jack?
Don’t have all the answers but a good start would be to extend or eliminate the 72 hour window to void the AOB. In many cases the insured has signed the AOB not knowing what it means, thinking they are signing it with their own carrier, and wouldn’t sign if they knew the headaches it would cause them. Plus I’d insert language in the laws preventing PA’s and lawyers from reporting the claims well after the AOB was signed.
Or just maybe pay the claims at higher rates to reduce the number of dis-satisfied ins consumers?
Not sure of the solution, but I personally know too many people who have been significantly shortchanged by their insurance carrier after a storm having to wait for appeals and having to hire public adjusters because they are offered 25 cents on the dollar for the repair (quoted), that when they have someone coming to them saying they will handle everything, just sign here, they jump at the opportunity.
As a P&C agent in Florida I see this everyday – part of the problem is also that there are many Florida based carriers whose claim culture is to first deny, deny and deny or shortchange a valid claim leaving the customer w/o any options but to do the AOB.
I won’t mention any names (but you know who you are), a simple Google search will show some of these carriers have horrible reviews, some as low as 2 stars. Who in their right mind would buy coverage from a carrier that is rated so low is beyond sanity.
You and I must be dealing with different carriers.
I dealt with one of those here in Texas. This company was recently acquired by Flo. Early on in my appointment two separate customers filed claims, and both customers had to go to the department of insurance to compel them to pay the claims that were clearly covered by the policy (a theft, and a burst pipe). I stopped placing policies with them right away.
Having started my career in claims in Florida, I am continually reminded why I left of my own volition to move to North Carolina, where the claims environment is so much more civilized. First bad faith, then hurricanes, then sinkholes, then AOB, then construction defects… ad nauseum. Lawyers and their lackeys down yonder follow the money. They are going to pull on that teat until they kill the cow.