By: Scott A. Padgett
This past spring, the insurance and banking lobbies created quite a stir in the water and fire damage mitigation and restoration industry. During March and April, water mitigation contractors and restoration companies in Florida experienced a sharp sense of panic, inundated their construction attorneys with emails and telephone calls, and organized to participate in the Florida legislative process. Why? Simply stated: Florida House Bill HB 909 (2013). HB 909 was filed on February 13, 2013 by Representative John Wood, and was referred on as favorable by the House’s Insurance and Banking Subcommittee and Regulatory Affairs Committee.
So what created the stir? If passed, the following provision would have been added to section 627.422, Florida Statutes:
- Any homeowner’s insurance policy may prohibit the assignment of rights or benefits under the policy, and a third-party beneficiary may not accept an assignment or recover against any policy that prohibits assignment. Any assignment of rights or benefits under a homeowner’s policy that prohibits assignment renders the coverage void.
The typical practice of many water mitigation and restoration companies is to include assignments of insurance benefits in their standard contracts so that they can step in to the shoes of their customers and pursue homeowners’ claims as an assignee of the homeowners. The practice developed because homeowners generally have fewer resources and more difficulty pursuing claims that have been denied by their homeowner’s insurance companies after experiencing water and fire damage.
