The District Court of Appeal of Florida, Fifth District, has ruled that Holding Insurance Companies Accountable LLC (HICA) lacks standing to sue American Integrity Insurance Co of Florida due to its failure to meet the state’s Assignment of Benefits (AOB) agreement requirements.
The court’s decision underscores the application of Florida’s 2019 AOB reform laws.
The case stems from a 2019 roof damage claim filed by a homeowner in The Villages retirement community. The homeowner initially signed a direction-of-payment agreement instructing American Integrity to pay Noland’s Roofing directly for repair work.
Subsequently, the homeowner entered an AOB agreement with HICA, a company claiming to assist policyholders in enforcing their insurance rights, as per a report from AM Best.
HICA’s agreement included a disclaimer stating that the company would not provide services such as repairing, restoring, or protecting the property. The contract specified that payments would align with any direction-of-payment agreements in place.
The homeowner also signed a document affirming that they wanted HICA to hold the insurer accountable and ensure compliance with the direction-to-pay agreement.
HICA later filed a lawsuit against American Integrity for breach of contract, alleging the insurer did not fully pay the homeowner’s claim. At trial, HICA argued that its contract was not an “assignment agreement” as defined by Florida law, making it exempt from AOB regulations.
American Integrity countered that the agreement did fall under AOB statutes but failed to meet the necessary requirements, rendering it invalid.
Florida law broadly defines assignment agreements as any instrument transferring post-loss benefits under a property insurance policy to a person or entity providing services to protect, repair, or restore the property. HICA argued that it was not a contractor providing such services and therefore did not fall under AOB rules. However, the court disagreed.
The court ruled that HICA’s contract effectively sought funds to facilitate repairs and fell under the scope of the AOB statute. It noted that the agreement failed to include required information, such as the scope of work, estimated costs, and notices about the insured’s right to cancel the agreement.
The court also said the contract attempted to circumvent AOB regulations by mischaracterizing its nature.
Without a valid AOB agreement, the court concluded that HICA lacked standing to sue American Integrity.
The 2019 AOB reform laws, part of a broader insurance reform effort in Florida, were designed to reduce litigation and curtail abuses in the property insurance market. These reforms have been cited as pivotal in addressing Florida’s property insurance challenges, which were exacerbated by legal system abuse and AOB fraud.
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