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New Study Says AOB Abuse Increasing Insurance Costs in Florida

A new study released by the Insurance Information Institute confirms Florida’s assignment of benefits (AOB) crisis is costing Floridians billions of dollars in unnecessary litigation and inflated claim costs and is continuing to spread statewide.

“We estimate Florida’s auto and homeowner policyholders have paid about $2.5 billion in insurer legal costs over the past dozen years, a troubling trend driven by plaintiff’s attorneys who are abusing Florida’s current AOB system,” said James Lynch, the I.I.I.’s chief actuary. “That doesn’t count the billions more in excess claim settlements that are at the heart of the problem.”

According to the report, in Florida, abuse of AOBs has fueled an insurance crisis. Florida’s legal environment, the report adds, has encouraged vendors and their attorneys to solicit unwarranted AOBs from tens of thousands of Floridians, conduct unnecessary or unnecessarily expensive work, then file tens of thousands of lawsuits against insurance companies that deny or dispute the claims.

The I.I.I.’s report citing AOB lawsuit abuse is supported by the American Tort Reform Association (ATRA) which last week announced Florida as the worst “Judicial Hellhole” behind only California.

The Florida Chamber and its Consumer Protection Coalition are leading efforts to reform Florida’s “one-way attorney fee” statute that is fueling AOB abuse.

“This new report highlights the price that Florida’s hard-working families are paying because of unchecked AOB abuse and out-of-control litigation,” Edie Ousley, Vice President of the Florida Chamber of Commerce, told the Insurance Journal. “We look forward to working with Governor-elect Ron DeSantis and the new leadership in the Senate and House to pass real consumer protections and put an end to AOB abuse during the 2019 legislative session.”


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