Water damage claims jumped 46 percent since 2010, state says

Leaky pipeThe frequency of water-damage claims in Florida — such as from a busted pipe — has climbed 46 percent and costs rose 28 percent since 2010, state regulators said Monday.

Insurers and allies say the state data call among private-sector insurance companies provides more reason for state legislators to pass bills restricting what they see as abuses when consumers sign over insurance benefits to third parties.

Attorneys, contractors and others are fighting such legislation, saying it represents a bid to lowball consumers and restrict their rights.

There has been a near-tripling in the use of  “assignment of benefits” (AOB) agreements, from 15.9 percent of claims from 5.7 percent in 2010, the state report found. The report looked at 259,742 reported water claims and measured the frequency and severity of water claims per 1,000 policies.

“Unscrupulous trial attorneys and shady home repair firms are responsible for a huge surge in water damage claims involving AOB that is spreading statewide and Florida’s consumers are paying the bill for this abuse,” said Mark Wilson, president of the Florida Chamber of Commerce. The chamber spearheads a group called the Consumer Protection Coalition.

Attorneys say claims of crisis are overblown.

“The data shows us a steady 8 percent increase per year, not a real shocker,” said Nicole Vinson, a Tampa attorney who sues insurers and heads a group called Policyholders of Florida. “It’s not the crisis that the carriers cried wolf about.”

For its part, state-run Citizens Property Insurance Corp. has blamed growing water-damage claims for raising rates in South Florida. Opponents say it’s a smokescreen to save millions on claims and distract attention from questionable company spending of $300 million on offshore reinsurance, for example, that severely cramped its budget and cost customers money.

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