This last week, many locations across South Florida have received between 4”- 14” of rain, which is typically a month’s worth of June rain. The cloudburst has broken daily records in numerous cities from West Palm Beach to Ft Lauderdale.
While the deluge has thrown things out of gear, homeowners are finding themselves deal-ing with flooding and damage to roofing and other features of their homes. Unfortunately, these desperate situations have also seen a spike in Assignment of Benefits (AOB) fraud and abuse cases.
Understanding what AOB is
The modus operandi of unscrupulous repairmen, roofers and water extraction companies and contractors is seamless. This is how the AOB fraud works:
- When a homeowner is dealing with various rain and flood-related problems, their first instinct is to contact a water extraction company or a plumber.
- After the contractor arrives, they usually encourage the homeowner to quickly sign an AOB form and in return, the contractor will repair all the damages, and handle the claim with the insurance company directly...simple, easy, problem-solve; right? Not so fast.
- The contractor typically proffers the contract and urges you (the homeowner) to sign on the dotted line and convince you that they will work with your insurance company. This, in turn, will take the burden of the claims process off your shoul-ders.
- This is a red flag, and one you shouldn’t be ignoring. If you do sign on those pa-pers, you may just become one of numerous AOB fraud victims in the State and may face considerable monetary losses.
- An AOB authorization essentially results in you handing over all the benefits and rights of the insurance policy that you purchased. When they ask you to sign an AOB, it could mean that a third party is attempting to usurp your insurance policy.
- By signing the AOB, you inadvertently give the contractor/ roofer/vendor the power to significantly inflate the scope of the repair work which escalates the cost of your claim.
- If your insurance provider disputes that bill, you may have to be pay the difference yourself.\
- What is probably worse is that some dishonest vendors and trial lawyers may use Assignment of Benefits to file a lawsuit against your insurance company, without your consent or knowledge.
- In essence, a third party can use your insurance policy to sue your insurance com-pany over the claim, even if you don’t intend to sue. You could be caught in the crossfire and may have to deal with dragged out litigation processes and more.
How to avoid AOB fraud
AOB is a real and growing problem that is driving up the cost of auto and home loans across the State. These are the steps you should follow to avoid getting caught in the AOB trap:
It’s best not to entertain any contractors, vendors or water extraction company repre-sentatives, when it comes to filing an insurance claim for flood damage or rain damage. It’s crucial that you contact your insurance company and speak to them yourself first. This gives you a very clear idea about the next steps you should take.
Similarly, it’s critical to note that all insurance companies and agents have a pre-ferred vendor list of trustworthy water extraction companies and contractors. As an added bonus, the insurance company will often pay for those costs and not include them in your claim deductible.
Never sign on any type of AOB form without consulting your insurance company. Make note of and take pictures of all the damages and losses. Aside from certain emergency measures, don’t permit anyone to start any work till you complete the documentation and contact your insurance company.
For any more information about how to go about the claims procedure, contact Dunham Insurance at this number-954.564.7772 or via our Contact Us page. We are here to sup-port you every step of the way to ensure you don’t become a victim of AOB fraud.