TALLAHASSEE — A trend has emerged in the storm-battered
Sunshine State in which a relatively small number of roofers and attorneys are
utilizing assignment-of-benefits (AOB) clauses in homeowners' insurance
policies to sue insurance companies for more than the actual cost of repair or,
in some cases, for non-existent damage.
According to a report from WFTV 9 in Orlando, these roofers
are falsely claiming that roofs need to be replaced because of hail damage and
offering to do the work for free. However, in most cases, there is no storm
damage—just a roofing company looking to obtain an AOB from homeowners so
they can bill the insurance company for non-existent damage.
Scott Johnson of Johnson Strategies LLC said this kind of
activity is “absolutely” rampant in Florida, particularly in upscale
neighborhoods where the roofs are an average of 18 to 20 years old.
“Insurance doesn’t pay for gradual wear and tear or
deterioration,” Johnson told the Florida
Record. “It covers damage that is ‘sudden and accidental.’ Align this fact
with the fact that there was no hint of roof damage until two years after the
alleged hail event, and then, only after receiving the promise of a free roof.”
Johnson said in a blog post that homeowners victimized by
these scam free-roof offers are asked to sign an AOB contract “before their free
damage inspection inevitably reveals hail damage.”
According to Johnson, insurance companies are left in a
difficult situation when faced with claims from third-party service providers
who sue on behalf of the homeowner.
“It’s proven more cost effective to simply go ahead and
provide the roof replacement or repair,” he said.
Johnson said most of these companies come from out of town
to offer free roofs, and the number of law firms participating in this scheme
is not that high.
“The vast majority (90 percent) of the…claims come from a
list of about 20 law firms,” Johnson said.
Of the 2,422 wind/hail claims filed in 2014 in Orange, Lake,
Pasco and Hillsborough counties, Johnson said 72 percent were tied to just
three roofing companies.
Cam Fentriss, legislative counsel for the Florida Roofing and Sheet Metal Contractors Association, told the Florida Record, “I don’t think this type of rip-off is rampant quite
yet, but it is well on its way.” She added that the problem has spread beyond
South Florida into Orlando, Jacksonville, Tallahassee and other parts of the
Fentriss said timing makes this type of scam difficult and
expensive for insurers to prevent.
“Frequently (if not almost always), the phony work is
completed before the insurance company gets the claim,” she said. “This means
any evidence is gone.”
According to an update published by the Florida Justice
Reform Institute (FJRI), “the prospect of one-way attorney’s fees has encouraged a
growing number of lawyers to partner with various service providers to solicit
assignments of benefits from policyholders.”
“The one-way fee is meant to benefit the homeowner, not the
vendor,” FJRI President William Large told the Florida Record.
Typically, Large said the insurance company will contact the
homeowner when an inflated claim is filed by a third-party vendor. He said the
insurance company will ask why the larger claim amount was filed.
“They say 'the homeowner told me to do this,'” Large said. “The
homeowner is often an innocent pawn.”
According to data from the Department of Financial Services’
Service of Process (SOP) database, Florida’s population grew by 26 percent
between the years of 2000 to 2016, but the number of lawsuits filed against
insurance companies in that same time period jumped about 280 percent.
“Litigation involving AOBs is unique in that it is abundant,
yet derives from a very small set of attorneys, law firms, and vendors,” the FJRI said in its update.
Shannon Nelson, communications coordinator for the Better
Business Bureau’s Northeast Florida and Southeast Atlantic region, told the
Florida Record she thinks “consumers are much more savvy than these
unscrupulous contractors give them credit for.”
Nelson said the regional BBB branch received more than
57,000 inquiries about roofing contractors in 2016, yet only received 150
complaints about the same type of business.
“We do receive inquiries from consumers especially when
severe storms come through about companies using tactics such as these and
always advise them to get several written quotes, the business licensing
information and insurance information,” Nelson said.
Nelson said she hopes these types of scams do not drive up
“This is an opportunity for insurance companies, state
agencies, non-profits and the media to work together to educate Florida
consumers about how to properly hire a contractor and what their rights are as
a consumer and what their responsibilities are as a homeowner,” she said.
Nelson added that the bureau has partnered with the Florida
Department of Business and Professional Regulation to educate consumers about
hiring licensed professionals.
“We would encourage any homeowner that is contacted by a
business unsolicited about storm damage to request estimates from other roofing
companies in the area to verify if there is in fact damage to their home,”