Florida's Auto Insurance Crisis: A Deep Dive into the AOB Scandal and Legislative Reforms

The AOB Scandal in Florida

Florida's Assignment of Benefits (AOB) system, once a customer-friendly practice, has turned into a magnet for fraud. Vendors and their attorneys have exploited the legal environment to solicit unwarranted AOBs from thousands of Floridians, leading to unnecessary and expensive work and a surge in lawsuits against insurers. The situation has escalated to a point where the National Insurance Crime Bureau (NICB) found Florida to have the highest number of questionable auto-glass claims among the 50 states in 2020.

2022 Reforms and the Current Legislative Proposal

In 2022, Florida took crucial steps to address its property/casualty insurance crisis by eliminating AOB laws for property claims. However, auto-related AOBs remained untouched. The recent legislative proposal aims to prevent motorists from assigning their legal rights in auto insurance claims to repair shops, addressing the exploitation of the auto glass law intended to encourage windshield repairs. This law has been abused by repair shops, leading to a 4,000% increase in auto glass lawsuits from 2011 to 2021.

Hope for the Future and Practical Advice

The proposed measure offers hope for stabilizing Florida's insurance market, but it will take years to fully address the impacts of fraud and legal system abuse. As Florida is a "no-fault" state with high attorney involvement in accident claims, it ranks among the least affordable auto insurance markets. For consumers, understanding the AOB process and being cautious about signing AOB contracts can help mitigate risks. Staying informed about legislative changes and insurance market trends is crucial for making informed decisions.