109 Iowa L. Rev. 403 (2023)
Abstract
Assignment of Benefits (“AOB”) abuse has proliferated throughout the Florida property insurance market, contributing to excessive litigation, insurance company insolvencies, and higher premiums for insureds. The issue became so severe that the Florida legislature recently prohibited the practice of assigning property insurance benefits. This problem has been exacerbated in Florida by environmental, legislative, and judicial conditions, but AOB abuse across the country is a growing concern that cannot be ignored. AOB litigation has already reached the Iowa Supreme Court, and more cases will likely follow in other Iowa courts. While AOB abuse has not reached the magnitude that it has in Florida, the Iowa legislature can proactively address the problem by reforming Iowa’s existing AOB statute to closely reflect recent statutory amendments the Florida legislature enacted to correct the Sunshine State’s troubled property insurance market. Iowa lawmakers should learn a lesson from Florida and make the necessary legislative changes before further difficulties with AOB abuse arise. Consumers will benefit from stable premiums and higher quality insurance products; insurers will benefit from predictability and market stability; and the many honest contractors in the field will be able to operate knowing they will receive fair and just compensation for their work.