Fraud through Assignment of Benefits. And it's legal

[Anna Toi-GB]

Hello BP,

Recently my roof contractor met with an insurance adjuster for the claim that I initiated. I'm still waiting to hear back on the outcome of the claim. However, the contractor told me that the insurance company will pay for a new roof, and he will handle all the claim process and paperwork. I only need to sign "Assignment of Benefit (AOB)." A quick google search and phone call with my insurance agent revealed that this is a huge scam in Florida and it's legal. Essentially, the AOB transferred the right of the homeowner to the contractor to negotiate the claim or sue the insurance company. Additionally, the contractor collect all the proceeds from the claim payout. From what I understand, the contractor can inflate the price of the repair and bill it to the insurance company. If the claim is denied or the payout is less than the bill, the contractor can turn around and have the homeowner pay the difference. If not paid, the contractor can put construction lien on the property. 

I refused to sign it but he still pressures me into signing. Has anyone ever experienced this?

[Bill F.]

Originally posted by @Mark Fries:

I don't understand how this posting is relevant to real estate investing?

 Does FL not have any rental housing?

Do REI in FL not have insurance on their properties?

Do rentals in FL have a magic force field around them that protect them from unscrupulous contractors?