The state of Florida has not experienced a significant hurricane for the last 10 years, yet homeowner insurance rates are increasing as a result of water based claims. This contradiction is the result of a process known as Assignment of Benefits. It’s a scheme that allows homeowners to receive compensation quicker. However, it means the details of the claim are filled out by the vendor and contractors. This opens the door to fraudulent activity, because some contractors increase the cost of repairs artificially to increase the size of their paychecks. This in turn means that homeowner insurance policies rise.
The problem is propagated by shady law firms who teach these contractors the art of increasing the cost of repairs. These are the same law firms who go up against the insurance companies when they refuse to pay the inflated repair costs. This creates a perfect storm whereby the home insurance premiums rise.
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