“Never trust your insurance company” is a message that we hear all the time as Florida insurance agents. The funny thing is when you step back and look at our industry, the vendors out there are the ones you don’t want to trust. Sadly, several of our insurance clients have received lawsuit paperwork mailed to me that named me as a plaintiff and I have no idea why.” Unfortunately, our industry is riddled with fraud and what is known as “AOB’s”. These AOB’s are an assignment of your benefit to the policy, some go so far to have the vendor be a power of attorney! AOB abuse causing insurance rates to skyrocket!
Watch out for AOB Abuse
One client, small business owner Mike Hinsch’s trouble started after replacing the windshields in three work trucks. His commercial auto policy increased from $16,000 a year to $22,000 over the windshield claim! Why? This plumber had no idea the glass company hit his insurer up for 14 thousand dollars.
Too often, clients will contact the insurance company to get the approved replacement costs that are covered in their policy. Then once they are signing paperwork for their appointment, the vendor slips something into the paperwork, and doesn’t explain it’s an assignment of benefits of the policy. This gives them the right to sue the carrier on your behalf without your permission.
Why would they need to sue the carrier? Because they decided to change the price of the windshield to $1,500 from the original estimate of $700. They don’t tell you they were changing the price, they had no reason to change the price…they just did.
They did that because they knew that insurance would only agree to pay the agreed upon price of $700 and then they knew that they could then file a suit to try to get the additional $800 PLUS now the attorney can charge thousands of dollars in attorneys fees…sounds crazy, but it happens every day!
Hinsch had no idea the glass company hit his insurer up for 14 thousand dollars.
Clients have been named as a plaintiff in a lawsuit, and never knew until they received paperwork after the fact!
What can you do?
Keep good records and get written evidence that they quoted $700 to replace the windshield. That way, you can sign an affidavit and undo what the vendor has done under AOB. Once there, read what you’re signing.
Another recommendation is if you have a claim, even something as small as a windshield replacement, call your carrier or agent FIRST! If you use a vendor recommended by the carrier, they guarantee the work and the quality AND you avoid scenarios like this where you are involved in a lawsuit and don’t even know it!