Citizens Property Insurance has released a statement urging its policyholders recovering from Hurricane Ian to protect themselves from fraud and abuse by contacting their agent or Citizens first as they work through the recovery process.
The company states that unscrupulous contractors and repair companies thrive in the frenzied days following any storm, adding, “Policyholders must be wary of unlicensed contractors or deals that sound too good to be true.”
Citizens advise policyholders not to sign anything, including an assignment of benefits (AOB), before consulting with Citizens or their insurance agent.
The company adds that policyholders are most likely to be offered an AOB while making emergency repairs or when companies come to their door soliciting business.
It notes, “Policyholders may be told repairs cannot be completed until they have signed an AOB contract, which allows the company to step in on the policyholder’s behalf, submit the claim, and deal directly with Citizens. The AOB may also allow them to take control of your policy.”
Florida’s Chief Financial Officer, Jimmy Patronis, announced in May that his office would be pushing for reform to AOB laws, “including banning the bundling of these assignment of benefits.”
Expanding on the AOB challenge, Patronis added, “Much of the fraud and abuse in our legal system we have highlighted this morning started with a policyholder assigning their benefits away to somebody else, to a fraudster. We cannot allow law firms and public adjusters to get into the business of bundling these AOB’s and selling them the same way you would a security for a profit.
“I want to deter this feeding frenzy of bad actors going after our consumers to sell AOB’s on the open market, which again ultimately drives up rates, which drives carriers out of the state of Florida, because the environment allows that type of activity to exist in the first place.”
Patronis was joined by Florida’s Citizens CEO, Barry Gilway, who said that one way Citizens is trying to keep premiums down is by taking a hard line on fraud.
Now, after Ian, the risk of emerging and present fraud schemes in Florida’s insurance market increases, with the danger of inflating overall industry loss, as well as hiking costs for policyholders.
