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Unlicensed Contractors and Assignments of Benefits (AOBs): A Warning for South Florida Homeowners

On Behalf of | Apr 19, 2019 | Insurance Claims |

In the aftermath of a hurricane or a major tropical storm, the recovery and rebuilding process can be overwhelming not just for individual homeowners, but for communities as a whole. All of a sudden, the demand for insurance adjusters, contractors and temporary housing is far greater than the supply, and this means that the duration of the recovery process gets extended and many people are forced to move far away from their homes.

Sadly, some people view this overwhelming demand as an opportunity to take advantage of homeowners in need. We often see a number of scams targeting homeowners after hurricanes and major tropical storms, and one of the most-common scams involves offering unlicensed contractor services. These unlicensed contractors typically approach homeowners directly (often in person), and they use fraudulent assignment of benefit (AOB) forms to get homeowners to sign over their rights to payment from their insurance companies. Then, they leave never to be seen or heard from again.

Homeowners: Always Ask for a Contractor’s License Number

Florida law requires all contractors to be licensed, and you can look up contractors’ license numbers online through the Florida Department of Business and Professional Regulation (DBPR) website. In addition, under Section 489.119 of the Florida Statute, contractors are required to:

  • Display their license number on their vehicle (if the vehicle displays their name or logo);
  • Include their license number on all building permit applications;
  • Include their license number on all advertisements, proposals and bids; and,
  • Include their license number on all contracts, including AOBs.

If a contractor does cannot provide you with his or her license number, or if the license number is left blank on an AOB or service contract, this should be viewed as a red flag. Even if the contractor tells you that you can look up their license number online, this may simply be a ploy to try to assuage your concerns. Although unlicensed contracting is illegal and fraudulent AOBs and service contracts are unenforceable, homeowners should avoid signing agreements with unlicensed contractors if at all possible.

Choosing a Licensed Contractor to Repair or Rebuild Your Home

Depending on the terms of your homeowner’s insurance policy, you may or may not have the right to choose your own contractor. Increasingly, insurance companies are inserting “managed repair” clauses into their policies, and these clauses allow insurers to choose the contractors that perform repairs. When filing a homeowner’s insurance claim, it is important to know whether you have the right to choose your own contractor; and, if you do, you need to make an informed decision. Unfortunately, trusting your insurance adjuster and individuals who claim to be licensed contractors can be a mistake, and it is one that homeowners should do their best to avoid.

Contact the Broward County Property Damage Lawyers at Saavedra | Goodwin

Our attorneys provide experienced legal representation for homeowners who are dealing with the aftermath of hurricanes and major tropical storms in South Florida. If you have questions and would like to speak with an attorney, we invite you to call (954) 928-9568 or contact us online for an initial consultation.

Founding Partners Damaso W. Saavedra and Allyson D. Goodwin