Does Florida’s AOB Statute Apply to My Assignment Agreement?

Just over a year ago Florida Governor Ron DeSantis signed House Bill 7065, which became Fla. Stat. §627.7152—better known as Florida’s Assignment of Benefits statute.

Since July 2019, insurance carriers have used the AOB statute to point out any minor technical deficiency in an assignment agreement to claim “gotcha,” arguing that these “deficiencies” invalidate the agreement and any related lawsuit must be dismissed. Alternatively, insurance carriers attempt to use the AOB statute to avoid their obligation to pay attorney fees otherwise owed under Fla. Stat. §627.428.

In response, a real dispute has developed in the courts concerning when Florida’s AOB statute applies to assignment agreements. Insurance carriers point to subsection (13) of the AOB statute, which states:

This section applies to an assignment agreement executed on or after July 1, 2019.

You might be asking, how is there a dispute then?

Well, the Supreme Court of Florida in Menendez v. Progressive Express Insurance Company, Inc.,¹ held that a very similar statutory scheme could not apply retroactively to insurance policies issued before the statute was enacted. This 2010 case concerned a personal injury protection (PIP) benefits presuit notice requirement. However, state and federal courts across Florida agree with the reasoning in Menendez and its application to the AOB statute. If this topic interests you, I recommend reading the full Menendez opinion.

While this does not invalidate the AOB statute, it limits the statute’s application. First, the assignee must look at the policy in effect at the time of the loss and determine whether that policy was issued on or after the effective date of the statute, July 1, 2019. If the policy was issued prior July 1, 2019, then the statute should not be applied retroactively. This means that the AOB statute shouldn’t apply to any assignment agreements for Hurricane Irma and Hurricane Michael, Florida’s most recent catastrophes.

If you’re a contractor reading this, please don’t take this to mean that you can wholly disregard the statute. While Florida courts have and should continue to reject the insurance carrier’s attempts to apply this statute retroactively, it is best for contractors to comply with the statute’s requirements out of an abundance of caution until an appellate court weighs in on the matter.
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¹ Menendez v. Progressive Express Ins. Co., 35 So.3d 873 (2010).