assignment of benefits

Meaningful reform could be on the way for the Florida insurance market, as a bill designed to reform the age-old practice of assignment of benefits (AOB) passed the Senate vote yesterday.

Florida’s Citizens Property Insurance Corporation is set to buy a larger reinsurance program for 2019 as it adds $200 million of coverage for non-coastal residential properties its covers following increasing losses from hurricanes, non-weather water-loss claims, litigation and assignment of benefits abuse.

COIN Reinsurance believes that the inevitable escalating rate hikes that hit insurance buyers due to loss adjustment and assignment of benefit (AOB) expenses can be countered by lower cost reinsurance for carriers.

In the state of Florida the incidence of so-called assignment of benefits (AOB) lawsuits connected with property insurance claims have risen by more than 70% over the last five years and as this continues primary insurance rates are rising with them.

Florida’s Citizens Property Insurance Corporation said that a recent surge in claims related to non-weather water losses in South Florida has increased its costs enough to offset the lower cost of reinsurance and other risk transfer, resulting in the need for a proposed statewide average rate increase of 7.9%.