Thousands of Florida mortgages could be at risk because of insurance abuse

jburkeson1 · February 20, 2017, 9:54pm

Thousands of Florida mortgages could be at risk because of insurance abuse

TALLAHASSEE — An Ohio insurance-rating company has warned that recent court rulings and skyrocketing losses from water-damage claims have created an “uncertain operating environment” for Florida’s property insurers and that it will downgrade the financial stability of 10 to 15 Florida-based companies, potentially threatening the solvency of thousands of homeowners policies.

The driving factor behind changing market conditions, Demotech said, is widespread abuse of “assignment of benefits,” the practice in which policyholders who need repairs to their homes may assign their rights to seek reimbursement from the insurance companies to third-party contractors.

Under the practice that began in South Florida and is now used widely in the Orlando and Tampa markets, contractors persuade homeowners whose pipes or appliances have ruptured to assign over the benefits (AOB) and, working with attorneys, file lawsuits against the insurer if the claims are denied or payments are reduced.

Well if I wasn’t convinced that Four Point Inspections were horribly underpriced versus the liability associated with doing them I sure am after reading this. No doubt the insurance companies will be looking for a way to reduce their exposure here. The time is right to review plumbing inspection procedures, photos and documentation making sure that you can back up any inspection report you issue.

rlewis5 · February 20, 2017, 11:06pm

Been resurrected from the dead.
Glad to have you back…

evandeven · February 21, 2017, 1:47am

Yep.
It is why I don’t do stand alone 4-points.
All the defects from my home inspection are automatically pasted to the 4-point. Pictures to back it up.

Those 50 dollar four-pointers are in for a rude awakening…

wsiegel · February 22, 2017, 12:34pm

Its about time!!!