What Is An AOB?


By: Christel Silver Special to the Boca and Delray newspapers

AOB stands for: Assignment Of Benefits, a legal tool that allows a third party to be paid for services performed for an insured homeowner. When you sign an AOB contract, you give up the right to manage your claim, oversee the time and satisfaction of the repair. Many cases are not fraud – but fraud is on the rise!

Normally the homeowner would be reimbursed by the insurance company directly after making a claim.  So this appears to be a convenient tool for the homeowner especially after a disaster hits their home, like we had after hurricane Irma. They do not need to deal with the insurance company. Unfortunately this system is being abused. Many venders are overcharging insurance companies, often for work not even done, as there is no control. Or extensive work is being done that was unnecessary. The homeowner is out of it since he/she signed the form for AOB – but wait they are not out completely!

Many contractors – and the number is growing – have been inflating the repair costs. When the insurance company refuses to pay the full amount – the vendors go back to the homeowner to collect the difference. Some pay because they fear the high litigation costs. A charge which would not have been there, if the homeowner kept control of the repairs. If the homeowner cannot pay, the vendor files a lien on the property and forces some homeowners into foreclosure!

In 2006 there were 405 AOB lawsuits in Florida, this number was 28,200 in 2016 (based on information from the Florida Office of Insurance Regulation. Further the insurance claims that water damage claims where AOB was used appears to be 50 percent higher than others (a study of 80,000 Florida insurance claims).

This system has another negative impact as it forces the insurance companies to raise their premiums – as more unnecessary claims are filed for more money.

The Florida Realtor Association is fighting for the consumer – to protect you as a home owner.  Many Realtors making a donation to the RPAC (Realtor Political Action Committee) which is bi partisan – are fighting for your interests. For example, we are hoping to reduce the tax on business rentals, as we are one of the very few States who are collecting this tax.

This year in January we went to Tallahassee to meet with our Senators and Congressmen to ask for help with the AOB. We requested a reduction of Assignment of Benefits (AOB) abuse that drives up insurance premiums. We fought with the Florida lawmakers to pass legislation to control this abuse of insurance claims – but again – for the fifth time – legislation failed to make it through the Senate before the 2017 legislative session.

This January, as we were able to give them statistics of the abuse after hurricane Irma it appears that the legislators opened up to the idea that some legislation is necessary.

Don’t become a victim of AOB fraud and abuse. Call your insurance company first to discuss your options. If the vendor makes you unrealistic promises, call the insurance company before signing an AOB. The lawsuits are on the rise and driving the insurance premiums up. Be alert. You can also call the Florida Department of Financial Services Consumer Helpline at 800-342-2762.

About Christel Silver

Christel Silver is a full time Broker/Owner of Silver International Realty servicing the East Coast of South Florida. In 1985 she was licensed in Maryland and Washington DC as a Realtor and later as a Certified Residential Appraiser and Associate Broker and has been in Florida since 2001. The National Association of Realtor’s (NAR) President appointed her (2010-2014) and again for 2018 as the President’s Liaison to Germany, where she grew up and worked at the Justice Department for 17 years prior to coming to this country. The Germany Real Estate Organization (IVD) has an agreement with the NAR and she is an International member of this organization. Christel is a Certified International Property Specialist (CIPS), and a certified speaker teaching CIPS classes. Ms. Silver served the Florida Certified Residential Specialist (CRS) Chapter as President, as Regional Vice President helping Chapters to grow, and as a member of the Board of Directors for two years. She served previously as an ambassador. Fifty percent of her business is in the International arena. For more information visit www.silverhouses.com.