An Assignment of Benefits transferred the homeowner’s right to collect insurance proceeds — and the right to sue the insurer — to a contractor. Once signed, the homeowner was largely out of the process. The contractor controlled the claim, submitted the estimate, negotiated (or refused to negotiate), and filed suit when it suited them.

In practice this became a volume business. Statewide AOB-related lawsuits grew from about 1,300 around 2000 to nearly 135,000 by late 2018. Florida accounted for the overwhelming majority of U.S. homeowners insurance lawsuits despite representing only 8–9 percent of claims. Non-weather water losses and post-storm roof claims in South Florida drove much of the volume. Litigated AOB claims routinely cost multiple times ordinary claims. Those costs were socialized across every policyholder through higher premiums, more exclusions, and a market that nearly buckled.

Storm-chasing crews — frequently from out of state — arrived within days of hurricanes or hail events. They offered free inspections, high-pressure sales, and “zero out-of-pocket” pitches that often relied on illegal deductible waivers. Homeowners signed AOBs on the porch. Estimates then expanded. Full roof replacements appeared for partial damage. Water mitigation scopes ballooned. When insurers pushed back, the contractor sued under the assigned rights. The homeowner had already lost control. Many of these crews left the state after collecting payment. Warranties became unenforceable. Workmanship defects surfaced later. Licensing gaps made accountability difficult. This was not restoration. It was claim extraction.

The 2019 reforms added written requirements, rescission windows, and notice rules. They slowed the worst excesses. The 2022–2023 package, including the outright ban, closed the pathway. For policies issued or renewed after January 1, 2023, any attempt to assign post-loss benefits is void and unenforceable. Homeowners keep control of their own claims. Contractors can still be hired. They simply cannot seize the insurance rights.

The same legislative package that banned AOBs also eliminated Florida’s long-standing one-way attorney fee recovery for property insurance claims. Under the old rule, if a policyholder (or assignee) won any amount above the insurer’s offer, the carrier paid the attorney’s fees. That rule only ever paid when the claimant prevailed; a losing case recovered nothing. Removing it changed the economics. Attorneys no longer have the same statutory one-way fee protection on these property-insurance cases. The predictable result is that smaller claims — often in the $8,000–$15,000 range — can become uneconomical to pursue on contingency. Large claims still attract counsel. Modest, valid underpayments frequently do not. That contributes to the overall drop in lawsuits, but it also reduces practical protection for ordinary policyholders who cannot afford to fight an underpayment without fee recovery. The AOB ban and the fee change landed in the same bills, yet they are not the same reform. One closed a contractor-driven claim-control and inflation pathway. The other altered the risk calculus for every policyholder trying to enforce their own policy. Those trade-offs are examined in more detail here.

Florida was the extreme case, not the only case. Any state with significant storm exposure, a large contractor base, and unrestricted assignment rules is exposed to the same dynamic: third parties monetizing claims, inflating scopes, and shifting the cost onto the broader rate base. Banning or strictly limiting post-loss AOBs for property insurance keeps the policyholder in the driver’s seat. It does not prevent repairs. It prevents the transfer of claim control to parties whose incentives diverge from the homeowner’s. That is straightforward consumer protection.

The lesson is already spreading. Louisiana followed Florida in 2023, enacting its own prohibition on post-loss assignments of benefits under residential and commercial property policies. Louisiana’s law, like Florida’s, generally makes these assignments void and prohibits persons from soliciting or accepting them, subject to specified exceptions. Contractors operating under AOB-based payment models there now have to restructure accordingly.

Texas took a different legislative path, but arrived at a related conclusion: its 2017 reforms targeting storm-chasing litigation through HB 1774 were a direct response to concerns involving solicitation, inflated scopes, and litigation surrounding hurricane and hail events. Texas did not enact the same type of AOB ban as Florida and Louisiana. Three states, different storm profiles and different legislative approaches, but a common concern: preventing insurance claims from becoming a vehicle for excessive litigation and claim costs.

Contractors who still attack public adjusters usually lead with one line: “PAs charge a fee.” Yes. A regulated, disclosed percentage paid by the insured from the recovery the PA helps obtain. The homeowner sees the number before signing. It is transparent.

Now look at the contractor model under AOB. The contractor was paid directly by the insurer. In many cases the contractor also collected the homeowner’s deductible. Payment did not come from the insured’s pocket in the same way. The real cost was often buried in the scope itself. Inflating the price of the same project — unnecessary full replacements, padded line items, aggressive supplemental claims — functioned as a hidden margin. That inflation was not disclosed as a fee. It was presented as the “cost of repairs.” The insurer paid it (or litigated it). Every other policyholder ultimately subsidized it through rates. When the inflated claim was disputed, litigation costs compounded the damage. The homeowner had already signed away control.

On construction execution — measuring, sequencing, material matching, code compliance — some contractors may hold a real edge over a PA who hasn’t worked tools in years; that’s legitimate, earned expertise and it isn’t the target here. But on the claim itself — policy interpretation, coverage analysis, matching requirements, depreciation, documentation standards, negotiation strategy, and the difference between a covered loss and an opportunistic scope — the roles reverse. A licensed public adjuster is trained and regulated for exactly that work. Many contractors who operated under AOBs treated the policy as a funding source rather than a contract with defined terms and limits. The market paid the price for that approach in the form of systemic over-scoping and a litigation machine that damaged capacity far more than it restored homes.

The contractors still complaining about public adjuster fees while having built business models around direct insurer payment, deductible collection, and claim inflation are not necessarily defending homeowners. They are defending a less accountable system that Florida correctly shut down. A transparent fee paid by the insured from a properly documented recovery is not the problem. Seizing the claim, inflating the numbers, and externalizing the cost onto the entire market was the problem.