Whose Benefits?

Several months ago, I got an insurance lesson from a marsupial.

I was working in my home office one evening when I heard something in the attic. I didn't know what it was, but I knew I wanted it gone quickly.

The next day, I hurriedly located a pest removal company. The "technician" who showed up pointed out that a damaged board at the lip of the roof had created an avenue into my attic. He put out a Give-capture) trap in the yard, saying he wanted to make sure the animal, likely a raccoon or possum, was out of the attic before he made repairs.

His company could do the work, he said, and if I wished, it would take over dealing with my insurance company - I wouldn't have to do anything.

Still agitated that I had an animal sharing my roof and busy with work at that point, I paid the company's service charge and signed what's called an "assignment-of-benefits" contract that authorized the firm to do the repair and deal with my insurer.

Among readers, wiser heads than mine are now shaking, and eyes are rolling. But back to the story.

Overnight, the trap captured a possum, a homely creature that looks like a rough draft for some animal that turned out better in a final version. Later that day, another employee inspected my attic for about five minutes and repaired the board.

I would have been happy with the relocation of the possum and that modest fix, but the company explained that fully remediating the possum's invasion involved more work - "the first thing they do is pee," he said - and additional repairs to prevent another intrusion.

A few days later, the company shared the bill it was giving my insurer: More than $10,000 worth of work, including removing and replacing the insulation throughout the entire attic, replacing several other soffit boards, and three - three - treatments of "antimicrobial, antifungal, deodorizer and disinfectant" over every surface in the attic, at more than $1,000 per treatment.

The animal couldn't have been in my attic for more than 12 hours, and a battalion of possums couldn't have generated enough waste in that time to justify that level of disinfection. And, as it turned out, there was no insulation to remove in the area of the attic where the possum roamed. The pest removal contractor appeared to be operating off a template that fit the actual situation at my house somewhat imprecisely.

I also began to see that the assignment-of-benefits contract had marginalized me in the process - what the pest removal company said needed to be done and what the insurance company would pay was now mostly a matter for the two of them, not me.

The insurance company rep who inspected the attic to evaluate the proposed work had been down the assignmentof-benefits road before. Without impugning the company, he patiently explained the dynamics of the contract and politely encouraged me to call him first in case of another incident - it would save both me and the insurance company time and money.

Ultimately, the insurer and the pest removal company settled on the scope of the work. I ended up with some new soffit boards, an expensive insulation job and a spritz of sanitizer. The work was of decent quality. I burned through a chunk of my deductible and got a little bump in my premiums this year.

I can't really accuse the pest removal company of fraud, but it clearly used the assignment-of-benefits contract to game the system - inflating the bill with an eye toward my insurer's deep pockets. I got singed in the process, but some homeowners get burned: If the negotiation between an insurer and a contractor bogs down, the homeowner can end up with an incomplete repair and a lien on the house. Eager plaintiffs attorneys will sue the insurer on behalf of the contractor - and, of course, take a slice of the settlement.

Where you stand on all this depends on where you sit. Contractors and plaintiffs attorneys say assignment-of-benefits contracts enable homeowners to get emergency repairs under way, particularly if they can't afford to pay contractors up front. They're quick to play the "big, bad insurers deny too many claims" card.

Insurers, meanwhile, say the assignment-ofbenefit contracts create incentives for inflated claims or outright fraud that push up costs and ultimately premiums for everybody. Citizens Insurance has been flooded with so many burst-pipe, water damage claims in south Florida that it says it will have to raise rates; it's already made changes in its policies meant to limit assignments-of-benefits abuse and fraud.

It's no coincidence, of course, that pipes somehow began bursting all over south Florida just as Citizens developed a decent pool of reserves - the passion for justice and the "little guy" claimed by plaintiffs attorneys starts and ends with the presence of a pot of money to tap via litigation.

I'm with the insurance companies on this one, although they don't do themselves any favors with policies that are hugely difficult to understand. And if they want homeowners to call them first, they might do a better job of communicating that before the fact rather than afterwards.

The sad truth is that the current assignment-of-benefits "crisis" is just the latest chapter in the never-ending trench warfare between the plaintiffs Bar and the insurance industry. A few years back, it was sinkhole coverage. Next year, the entrepreneurial litigation crowd will likely find some other legal nook to exploit. The industry will respond, policies will grow ever more complex and the cost of doing business will rise.

Those costs, of course, will all continue to land squarely on us homeowners.