The Consumer Protection Coalition urges homeowners to beware of insurance scams involving Assignment of Benefits (AOB) in the wake of Hurricane Hermine.

The landfall of Hurricane Hermine unfortunately has created new opportunities for unscrupulous home repair vendors and trial attorneys to profit off the disaster by asking homeowners to sign an AOB when seeking repairs for damages. In doing so, the homeowner relinquishes control of their insurance policy, allowing a vendor to inflate the cost of claims and sue insurance companies that challenge the spiked charges. What results are increased insurance costs for everyone.

“Sadly, storms bring out scam artists seeking to cheat the system and take advantage of people during a crisis,’’ said Mark Wilson, president and CEO of the Florida Chamber of Commerce, which spearheads the coalition. “We urge homeowners to be mindful of home repair vendors offering deals too good to be true and to look closely before signing any document that gives someone else control of their insurance policy.’’

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The coalition noted that consumers do not need to sign an AOB to get storm-related repairs handled promptly, and they should contact their insurance agent and insurance company first to report damage and initiate the claims process.

“After a storm, people should be focused on getting their lives back to normal, not worrying about whether they are going to be the victim of an insurance scam,’’ said Michael Carlson, president of the Personal Insurance Federation of Florida, which is a member of the coalition. “Times like these underscore the need for Assignment of Benefits reform to ensure consumers are protected.’’

The Consumer Protection Coalition has been urging state lawmakers to enact meaningful AOB reform, warning that AOB abuse hurts homeowners, erodes Florida’s business-friendly environment and threatens the stability of the state’s insurance market. AOB abuse was nonexistent 15 years ago but over the past several years has become widespread in South Florida and is quickly spreading statewide.

AOB abuse has already become a major concern for Citizens Property Insurance Corp. The state-run insurer has recommended an average rate increase of 6.8 percent statewide for residential policies next year to offset an explosion in non-weather-related water loss claims.

The coalition joins Florida’s Chief Financial Officer Jeff Atwater, Attorney General Pam Bondi, Insurance Commissioner David Altmaier and Insurance Consumer Advocate Sha’Ron James in encouraging residents to be watchful of home repair scams.

“It’s unconscionable to think that someone would lie and cheat their way into profiting off of catastrophe, but unfortunately, it happens,’’ Atwater said in a release. “I strongly urge all Floridians to remain vigilant against such scams, and to report all suspicious activity to authorities immediately.’’

Wrote Bondi, in her weekly briefing: “following a storm, repairmen are in high demand, making conditions ideal for debris removal and home repair scams.’’

Here are some tips to protect consumers against fraud:

  • Call your insurance company first to report losses.
  • Hire only licensed, reputable companies and be wary of strangers who call or knock on your door asking for personal information.
  • Review all documents before signing and ask questions so you know exactly know what you are signing. Ask who is responsible for paying the vendor – you the consumer or your insurance company.
  • If you suspect fraud or suspicious activity, call the Florida Department of Financial Services, Division of Consumer Services Insurance Consumer Helpline at 1-877-693-5236.
  • If you believe you have been a victim of price gouging, call the Attorney General’s Price Gouging Hotline at 1-866-9-NO-SCAM.

The Department of Financial Services investigates reports of insurance and financial fraud in Florida and already has heard reports of insurance scams. In Taylor County, investigators are looking into reports of scammers claiming to be Federal Emergency Management Agency (FEMA) officials who are demanding a $150 deposit to help consumers file hurricane-related insurance claims. There is no fee for filing FEMA claims and anyone who encounters this scam should report it immediately to the Department of Financial Services’ consumer hotline.

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The Consumer Protection Coalition is a broad-based group of business leaders, consumer advocates, real estate agents, construction contractors, insurance agents and insurance trade groups pushing for reforms to end Assignment of Benefits (AOB) abuse. Learn more about the Coalition at www.FightFraud.Today.