Florida Office of Insurance Regulation Releases Assignment of Benefits Data Call Report

The Florida Office of Insurance Regulation (“OIR”) released its “2015 Review of Assignment of Benefits Data Call Report” today, February 8, 2016. 

The report provides aggregated results from a data call in which the top 25 personal residential insurance companies writing Homeowners (HO-3) and Dwelling Fire policies were required to participate.  Other personal residential property insurance companies also voluntarily participated.

Click here to read the report.  

The overall purpose of the data call was to assist in evaluating the impact to Florida’s property claims as a result of an assignment of benefits from a policyholder to a third party for water or roof damage repair (i.e. water pipes busting, leaks from appliances, etc.).

The OIR determined that, while claim severity has not changed significantly over the years among those policyholders with and without at least one assignment of benefits (“AOB”), the percentage of claims that utilize an AOB has grown dramatically since 2010.  Other conclusions were:

• The HO-3/DF frequency of water claims per 1,000 policies has increased by 46 percent since 2010. This represents an average annual increase in frequency of water claims of 8.3 percent each year.
• The average severity of HO-3/DF water claims increased by 28 percent since 2010.
• This represents an average annual increase in the severity of water claims of 5.4 percent each year.
• The combined impact of changes in frequency and severity result in an average 14.2 percent increase in water losses each year.
• Southeast Florida has the highest frequency and severity of HO-3/DF water losses; however, the highest combined change in frequency and severity actually occurred in Central Florida.  All regions are seeing significant increases in water losses.
• Claims with an AOB generally have a higher severity than claims without an AOB; however, the cause of this cannot be determined by this data call.
• There has been a significant increase in the use of AOBs since 2010, from 5.7 percent of the claims to 15.9 percent of the claims.  This increase in the use of AOBs is being seen across all regions.
• With the exception of Southeast Florida, all regions have at least 50 percent of the water claims being reported to the insurer within three days.

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