AOB in Florida — what it is and why the 2023 law changed everything.

An Assignment of Benefits (AOB) is a legal agreement in which a homeowner transfers their right to collect insurance benefits to a third party — typically a contractor, roofer, or restoration company. Once the AOB is signed, the contractor can communicate directly with the insurer, submit the claim, negotiate the settlement, and receive the insurance payment — without the homeowner's ongoing involvement. The homeowner is largely removed from the process after signing. AOB was widely used in Florida for roofing and water damage claims before the 2023 reform.

Effectively no — for most property insurance claims. Florida Senate Bill 2A (signed March 2023) prohibits the assignment of post-loss benefits in residential and commercial property insurance policies issued or renewed after the effective date. The reform was enacted after years of AOB abuse that drove Florida's homeowners insurance market into crisis: inflated claims, excessive litigation, and insurer insolvencies. AOB for other types of insurance (health, auto) is not affected. For Florida homeowners, if a contractor presents an AOB agreement as a condition of starting work, the agreement is likely unenforceable under post-reform policies — and the contractor may be attempting an illegal arrangement.

Do not sign it without legal review, and consider it a red flag. Since the 2023 reform, any contractor presenting an AOB for a property insurance claim in Florida is either: (1) Unaware of the law change; (2) Attempting to use pre-reform contract language that is now unenforceable; or (3) Operating in bad faith. The legitimate alternative: a work authorization and direction to pay, which authorizes the contractor to perform the work and directs the insurer to pay the contractor directly — without transferring your claim rights. You remain in control of the claim process. If a contractor refuses to work without an AOB, contact the Florida Department of Financial Services (DFS) to file a complaint at myfloridacfo.com.

An Assignment of Benefits transfers your claim rights to the contractor — they own the claim and can pursue it without you. A Direction to Pay (also called a direct payment authorization) authorizes the insurer to pay the contractor directly from your claim proceeds — but you retain all your claim rights. You still receive the adjuster's communications, you can negotiate scope and pricing, and you can dispute the settlement or pursue appraisal. The Direction to Pay is the standard, legitimate way for contractors to be paid from insurance claims. It does not trigger the AOB prohibition and does not expose you to the risk of a contractor inflating your claim or pursuing litigation you didn't authorize.

Florida's AOB abuse crisis was a primary driver of the homeowners insurance market collapse between 2017 and 2023. The mechanism: contractors (especially roofers and water damage companies) offered free repairs or low deductibles in exchange for AOB signatures. Once they held the AOB, they submitted inflated Xactimate claims, then sued insurers when they contested the claims — a profitable cycle enabled by Florida's one-way attorney fee statute. Litigation volume from AOB claims exceeded 71% of all property litigation nationally despite Florida having only 9% of claims. Insurers raised premiums, reduced coverage, or exited the state. Citizens Property Insurance grew to over 1 million policies as private carriers left. The 2023 reform aimed to halt this cycle by eliminating the AOB mechanism entirely.