Florida certainly delights countless vacationers each year with its gorgeous beaches and lofty city atmospheres. However, the state’s residents face a less sunny situation: that of insurance issues. Due to hurricanes and other weather-related catastrophes in the past, insurances companies have struggled to cover the overwhelming costs of the insured. Various factors come into play regarding this situation, but it is impossible to predict the future of natural disasters and their potential destruction.

According to the Florida Office of Insurance Regulation, the assignment of benefits (also known as AOB) is a document signed by a policy holder that a allows a third party to stand in for the insured and request direct payment from an insurance company. A third party in this situation is usually a roofer or plumber. While AOBs have been a part of Florida’s marketplace for over a century, loopholes in the way it is being used has caused a drastic increase in the cost of insurance for Florida homeowners. In 2016, the number of AOB lawsuits had reached a whopping 28,200. While this number is distressing, the issue is of top priority of the Office as they work to place less of the damage on innocent homeowners.

Insurance Journal also comments on the harsh effects of the AOB system, noting that many experts have already warned of an impending Florida market crisis because of the issue. With insurance skyrocketing in the state, Florida’s state-run insurer, Citizens, has taken the most damage by the abuse of the AOB. CEOs of Citizens now claim that the problem has become a litigation issue relating to all non-wind water claims. Insurance Journal states that southern Florida has been the area most affected by this issue, and Citizens predicts that the long-term solution for the AOB problem requires change to Florida’s one-way attorney fee statute, among other changes in consumer protection.