The Insurance Journal reported last month that a Florida Bill to end AOBs in windshield repair is getting closer to becoming a law.

 

Auto and tort-reform groups are celebrating a small victory as the state of Florida passed two bills aimed at ending the practice of “assignment-of-benefits” agreements for windshield repairs.

House Bill 541 and Senate Bill 1002 were approved by subcommittees of the Insurance & Banking Committee and Senate Commerce and Tourism Committee, respectively. Rep. Griff Griffitts Sponsored the bills which aim to curb litigation aimed at insurers by banning incentives for policyholders who use auto glass companies.

The bills seek to combat the prevalent practice of auto glass companies offering incentives such as free steaks or other gifts to motorists who agree to have their windshields replaced. Additionally, The Fix the Cracks Coalition said that the AOB statute incentivized law firms to file thousands of lawsuits against insurers over auto glass claims in recent years. Lawsuits over auto glass claims rose from 591 in 2011 to over 37,000 in 2022 due to AOB statutes, according to the Florida Department of Financial Services.

Rep. Tom Fabricio, R-Miami says, “In Florida, we have a litigation crisis. It should not be a normal course of business when a client walks in the door that you expect to file a lawsuit,”

The passage of these bills is a significant victory for insurance carriers and a hopeful sign for policyholders. Due to the complexity of the AOB process, policyholders have often found themselves exploited by unscrupulous contractors seeking to inflate the costs of repairs covered by insurance policies. This has resulted in an increase in premiums and a spike in frivolous lawsuits.

While it’s uncertain that one or both bills will pass both chambers, if they do, these bills will bring much-needed relief to both insurance companies and policyholders thanks to the efforts of auto and tort-reform groups.

If they sign both bills into law, they will take effect on July 1, 2023.

At AE21, we encourage our students to stay informed about current events that may impact the insurance industry. As advocates for professionalism and ethical behavior, we always prioritize the best interests of our clients and the industry as a whole.

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