**CONSUMER ALERT**

CFO Jimmy Patronis: AOB Contracts Are Illegal in Florida
~ Provides tips to avoid bad actors following Hurricane Debby ~

TALLAHASSEE, Fla. – Following the impacts of Hurricane Debby, Chief Financial Officer (CFO) Jimmy Patronis issued the following consumer alert warning consumers of contracts designed to avoid Florida’s ban on assignment of benefits (AOBs). AOBs were used by contractors to transfer the homeowner’s property insurance rights to the contractor but have been prohibited in Florida since January 1, 2023.

Consumers are seeing more contractors trying to avoid the AOB prohibition outlined in Florida Law by contractually requiring homeowners to have their insurers pay insurance proceeds directly to the contractor. The provision will typically use language like “Direct Payment Authorization.” These contract arrangements are often prohibited AOBs. Florida law defines an AOB as any instrument in which a post-loss insurance benefit is assigned, transferred, or acquired in any manner, in whole or in part, to or from a person providing services. If you have already signed a contract, you should seek legal advice before making any decision about what is best for you under the specific language of your contract – this area of law can be complex.

CFO Jimmy Patronis said, “Following storms, bad actors will come out of the wood work to come between you and your insurance claim. That’s why I’m reminding all Floridians that AOB contracts have been outlawed in Florida. Floridians currently recovering from Hurricane Debby should beware of unscrupulous characters who offer you any kind of Direct Payment Contract. Some Direct Pay Contracts hold you responsible to the contractor for more than what your insurance will pay for your loss without you knowing from the start what your project will cost. Worse, you could end up with a contractor’s lien on your property that could result in forfeiture of your home. Don’t sign anything! Avoid any contract that doesn’t include the total cost of the project and steer clear of high pressure sales tactics and vague contract terms. Your contractor should provide you with a good faith estimate of itemized and detailed costs for service and materials upfront. Obtain multiple estimates, read the fine print, and reach out to your insurer to find out what your policy covers before signing anything. If you or a loved one have questions regarding post-storm recovery, please visit PrepareFL.com or call my office directly at 1-877-MY-FL-CFO (693-5236). Also, if you or someone you know if suspicious of fraudulent activity taking place in your area regarding unlicensed public adjusters, roofers, or contractors, please report it immediately at FraudFreeFlorida.com.”

Insurance Consumer Advocate Tasha Carter said, “There is a reason that the Florida Legislature outlawed Assignment of Benefit agreements – third parties used AOBs as a tool of manipulation and fraud. Consumers now maintain control of their insurance claim and work directly with their insurance company without the interference of a bad actor. I encourage consumers to only file a claim with their insurance company or agent and document all emergency repairs. Do not allow anyone to pressure you to preempt the insurance company or forego the claims process. Contact your insurance company or the Department with questions.”

Other considerations in choosing a contractor:

• Verify Valid License - To determine if a contractor has a valid, active Florida license, visit MyFloridaLicense.com.
• Consider Contractor Reputation - Check for any violations or existing complaints against the contractor at BBB.org.
• Check Workers’ Compensation Coverage - Contractors must have proof of Workers’ Compensation coverage or a Workers’ Compensation Exemption found. Click HERE to verify.
• Report Fraud Immediately - If you or someone you know is suspicious of fraud, please report it immediately at FraudFreeFlorida.com. 

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About CFO Jimmy Patronis  
Chief Financial Officer and State Fire Marshal Jimmy Patronis is a statewide elected official and a member of Florida’s Cabinet who oversees the Department of Financial Services. CFO Patronis works each day to fight insurance fraud, support Florida’s firefighters, and ensure the state’s finances are stable to support economic growth in the state. Follow the activities of the Department on Facebook (FLDFS) and Twitter (@FLDFS).