Florida's 2023 legislation eliminating assignment of benefits (AOB) for property insurance claims has fundamentally reshaped the relationship between restoration contractors, homeowners, and insurance carriers — and three years into the new regime, the industry is still adapting.
Under the old AOB system, homeowners could sign over their insurance benefits to a contractor, who would then pursue payment directly from the carrier. The system was widely abused, with contractors and attorneys filing inflated claims and litigation that drove carrier losses and contributed to the Florida insurance crisis.
The 2023 reform eliminated AOB for property insurance, requiring that all claims be paid directly to the policyholder. Contractors must now obtain payment from homeowners rather than directly from carriers, a change that has complicated cash flow management and increased the risk of non-payment.
In practice, most contractors have adapted by requiring homeowners to sign direction-to-pay agreements, which instruct carriers to issue payment checks jointly to the homeowner and contractor. This approach preserves the contractor's ability to collect payment while complying with the AOB prohibition.
The reform has reduced insurance litigation significantly. The Florida OIR reports that property insurance lawsuits declined by 62 percent in 2025 compared to 2022, the year before the reform took effect. Carriers have cited the reduction in litigation as a key factor in their decisions to return to the Florida market.
For contractors, the new system requires stronger documentation practices, clearer contracts with homeowners, and more proactive communication with carriers to facilitate timely payment.
