Testimony from:
Caroline Melear, Fellow, Finance, Insurance and Trade, R Street Institute

In SUPPORT of SB 1002, “An act relating to motor vehicle glass.”

March 15, 2023

Senate Banking and Insurance Committee

Chairman Boyd and members of the committee,

My name is Caroline Melear. I am a Florida resident and a fellow in the Finance, Insurance and Trade program at the R Street Institute, a nonpartisan public policy research organization. Our focus is on free markets and limited, effective government. We have paid special attention to the complex relationship between insurance policies and lawsuit abuse in the state of Florida. As such, we are keenly interested in Senate Bill 1002.

The state of Florida has a unique relationship with assignment of benefits (AOB).[1] While many states across the country allow AOB, the Florida Supreme Court interpreted AOB law to give contractors and repair shops the ability to assume the benefits of an insurance policy from a policyholder without the consent of the insurance company and with minimal barriers to obtaining consent of the policyholder.[2] While the rights of the insured are of utmost importance, in practice, the reality is that these policies have led to rampant AOB abuse across many types of insurance in the state of Florida, ultimately victimizing the insured.[3]

SB 1002 aims to address a specific form of AOB abuse as it relates to auto glass repair, which has driven up costs of automobile insurance premiums for policyholders across the state.[4] This legislation would end the ability for a repair shop to obtain insurance policy benefits for auto glass replacement, repair or calibration/recalibration following a loss. This is an important step toward ending the years-long abuses of the insurance legal landscape in the state of Florida, which has become the poster child for predatory tort practices in the United States.[5]

“State data shows auto glass claim lawsuits are on the rise, with 28,156 such lawsuits filed last year. By comparison, there were 591 auto glass claim lawsuits filed in 2011,” Florida Politics reported. “Overall, there were nearly a half million auto glass claims filed in Florida last year, more than in any other state. There were fewer than 400,000 claims filed in Arizona, the No. 2 state.”[6] The correlation between AOB abuse and higher-than-average insurance premiums in the state of Florida is clear, with Floridians paying between 37 to 45 percent more than the national average for car insurance.[7]  

The R Street Institute supports Senate Bill 1002 in order to protect Floridians from predatory AOB practices that lead to inflated insurance premiums and higher costs for residents across the state.

Thank you,

Caroline Melear
Fellow, Finance, Insurance and Trade
R Street Institute
(404) 374-3248
[email protected]

[1] Timothy Engelbrecht, “As Florida Goes,” Butler Weihmuller Katz Craig LLP, Sept. 6, 2019. https://www.butler.legal/as-florida-goes.

[2] Jim Sams, “Florida Court Upholds Policyholder Right to Assign Benefits,” Insurance Journal, Jan. 5, 2021. https://www.insurancejournal.com/news/southeast/2021/01/05/595987.htm.

[3] Bethan Moorcraft, “AOB abuse in Florida rises 70% in 15 years,” Insurance Business America, March 28, 2019. https://www.insurancebusinessmag.com/us/news/breaking-news/aob-abuse-in-florida-rises-70-in-15-years-163448.aspx.

[4] “The Abuse of Auto Glass AOBs Continues,” Florida Justice Reform Institute, last accessed March 13, 2023. https://www.fljustice.org/files/135484680.pdf.

[5] “NFIB Applauds DeSantis’s Call for Tort Reform,” National Federation of Independent Business, Feb. 14, 2023. https://www.nfib.com/content/news/florida/nfib-applauds-desantiss-call-for-tort-reform.

[6] Drew Wilson, “Initiative launches to ‘fix the cracks’ in auto glass claims,” Florida Politics, Nov. 14, 2022. https://floridapolitics.com/archives/571441-initiative-launches-to-fix-the-cracks-in-auto-glass-claims.

[7] Mandy Sleight, “Average cost of car insurance in Florida in 2023,” Bankrate, March 2, 2023. https://www.bankrate.com/insurance/car/average-cost-of-car-insurance-in-florida.