Assignment of Benefit or also known as AOB fraud is really the main reason we in South Florida will see these increases where other parts of the State are actually seeing decreases. The frequency and severity of these claims in South Florida are through the roof. Frequency is up per 1000 policies well over 50%, but also the severity (cost of repairs) have skyrocketed while building material cost are stable due to the lack of storms. Clients are signing over ALL their financial rights to somebody who just shows up at their door from out of a phone book, webpage or even referral.
Clients are basically removed from the claim totally and the insurance carrier and attorney , water restoration or other third party now settle claim. Personally this has gone on for years really without issue as most people know. I'm not saying all Public Adjusters, attorneys or water restoration companies are bad, but unfortunately a few are totally taking advantage of the situation when a client experiences a loss and is under the distress of a claim and will sign anything, and in many cases don't even know that they have signed the AOB in the first place.
Some rebuild estimates/quotes M&L receives are so inflated they are almost comical. Third party claims being submitting to rebuild /repair estimates double , triple or even quadruple what most reputablegeneral contractors, Home improvement companies have also estimated to rebuild. Water clean up estimates can range on the same loss from 2000.00 to well over 20,000-30,000 just to clean it up.
Sadly in many cases the client gets the short end of the stick. Claims are delayed over verification of quotes to repair, and due to the high fraud rate every document, quote, estimates are being verified to nauseam. Clients are being asked for proof of repairs as claim checks of 20k,30k,40k , 50k, 100k or more are being paid to third party vendors and the client has not received any monies, or know that the claim was actually settled weeks if not months prior still sitting in a damaged home.
I am not making excuses for my industry, and most who know me know i would never be involved in an industry that would mistreat or defraud in anyway my clients . But it is now common place for a client to on paper be paid for an entire new kitchen, including cabinets, appliances, flooring in sometimes multiple rooms and when the insurer request the repairs were actually made the client has no idea there was even damage in some of these areas, much less their insurance carriers writing such excessive checks for the damage submitted and can only show a few thousand dollars of repairs being actually made while tens of thousands were paid out.
I've been in this industry for almost 2 decades and have never seen anything like this abuse. Not all claims are perfect...Not much is, but i can truly and honestly say if your claim is submitted and covered you will be paid and repairs will be made as they have for decades.
