Every homeowner needs insurance. But it could soon become a necessary evil. A huge spike in water damage insurance claims could lead to massive increases for homeowner’s insurance rates in Florida. Some insurance experts are hinting that rates could even double by 2022. But what is causing these increases and what can be done? These are issues homeowners throughout Miami need to pay close attention to in the next few years.
The Rise of Water Damage Claims
Many are blaming the problem on the high amount of lawsuits involving restoration companies. As a result insurance companies are forced to raise their rates or leave Florida. These lawsuits are often referred to as assignments of blame or AOB. A good portion of these lawsuits originated in Miami-Dade County and throughout South Florida. Insurance premiums for an average, worth $300,000, is expected to increase by $8,000 per year by 2022. It is a staggering number. Former state Chief Financial Officer Jeff At water was recently interviewed by CBS Moneywatch. He is among many who are concerned with this troubling trend.
“This is costing the honest Floridian enormous pain,” Atwater said. He also says insurance premiums are “flying off the charts” because a few law firms and contractors are taking advantage of the the current insurance system.
Water damage is unfortunately a very common threat for South Florida homeowners. In addition to pipe leaks, roof leaks and windstorms, South Florida’s coastal location and low sea level also makes it prone to flooding. In just the past few months, we have already witnessed massive flooding in part of Miami and Miami Beach. Because just about every homeowner uses their washing machines, dishwashers and take showers, pipe leaks are the most prevalent. Roof-top air conditioners run almost constantly during the summer months, making them also vulnerable to leaks.
Beware of Assignment of Benefits Agreements
Many homeowners immediately notify a restoration company when they have experienced water damage. However, many contractors will use some shady tactics. In many cases, they may tell the homeowner the job will be completed in one or two weeks after signing on the dotted line. To make the offer even more enticing, the contractor will tell the homeowner by sign an AOB to avoid making any payments. The restoration company will then collect the money from the insurance company. It may seem like a great deal. But in the end, it will result in higher premiums. Once the homeowner signs an AOB, they effectively forfeit all of their rights to negotiate with the insurance company. It also allows the restoration company to do whatever it wants, which may increase the claim. Consider these alarming numbers. A water damage claim without an AOB worth $6,700 can suddenly skyrocket to more than $13,000 with an AOB claim.
Protecting the Rights of Homeowners
Over the years, Miami insurance claims lawyer Jonathan Korin has seen just about all the tactics insurance companies will do to take advantage of policyholders–especially when an insurance claim is underpaid or denied. He and hls legal team at Korin Law, P.A. work diligently to help homeowners resolve their insurance claim disputes. They take pride in utilizing an aggressive and comprehensive approach to ensure each client is placed in the best position to succeed. To learn more, contact the legal team at Korin Law, P.A. and schedule a free initial consultation to discuss your case.