The reform
In the 2022 special legislative session, Florida reformed assignment-of-benefits rules to address perceived abuse. For most residential and commercial property policies issued on or after January 1, 2023, post-loss assignments are substantially restricted.
What changed
- Policyholders can no longer freely assign claim proceeds to contractors or restoration companies for most residential and commercial property policies.
- The policyholder must take claim payments directly and pay contractors separately.
- Water mitigation contractors, in particular, can no longer hold policy benefits directly.
What this means for homeowners
- Do not sign AOB contracts blindly: they may be unenforceable.
- Receive payments directly from the carrier.
- Pay contractors separately, verifying scope and cost.
- If a contractor pressures you to assign benefits, consult a public adjuster.
What this means for contractors
- The restoration/contractor business model has shifted: direct engagement with policyholders is required, with the policyholder as the payer.
- Contractors cannot pursue bad-faith claims against carriers on behalf of policyholders via assignment.