What is an Assignment of Benefits (AOB)
If you have ever had any type of damage to your home, you know it can be a challenging time. In an effort to just get your home back to normal, instead of contacting your insurance company right away to file a claim, you call a vendor to help fix the damage. In some cases, the vendor may hand you an Assignment of Benefits contract to sign.
An Assignment of Benefits contract, commonly referred to as an AOB, allows a third party vendor, such as a roofer or water extraction company, to “stand in the shoes” as you, the insured, and seek direct payment from their insurance company.
What are the RISKS associated with signing an Assignment of Benefits contract?
If the third-party vendor and the insurance company dispute the amount of the claim, the vendor could “stand in the shoes” as you, the insured, and sue the insurance
company. This would, without your choice, make your party to a lawsuit, against your insurance company
In addition, if the vendor requests more than the insurance company has deemed reasonable for the loss, you may be responsible for these additional costs.
The vendor would then have the ability to sue you for the amount owed and, in some cases, place a lien on your home due to nonpayment.
How does the Assignment of Benefits issue affect Florida as a whole?
From 2004 to 2016, there was a 7,000% increase in Assignment of Benefits lawsuits, driving up costs for Florida homeowners due to unnecessary litigation deriving from AOB claims.
If I need repairs completed, do I have to sign an Assignment of Benefits contract with a vendor?
No! Contact your insurance company directly to file your claim. They will advise you on next steps.
WHAT IF I HAVE ALREADY SIGNED AN ASSIGNMENT OF BENEFITS CONTRACT? Am I able to get out of an Assignment of Benefits contract if I have already signed one?
If you have signed an Assignment of Benefits contract, under the new law you are able to rescind for three reasons:
1) The new law allows for a 14-day rescission period, free of penalty.
2) You can rescind after a 30-day period if the contracted work has not been
3) You can rescind after a 30-day period if the agreement does not have a
commencement date and the contracted vendor has not performed substantial work.
How do I know if I’m signing an Assignment of Benefits contract?
If a vendor asks you to sign a document prior to beginning work, look for language in the contract that prevents you from communicating with your insurance company about your claim. The language may also say that it gives your vendor the ability to be directly involved with claim payments on your behalf, and file a lawsuit against the insurance company, even without your knowledge.
Where can I get additional information about Assignment of Benefits?
There are a plethora of news articles about the Assignment of Benefits contracts and how they have impacted Florida homeowners. Our Assignment of Benefits page has a few of these, but you can also go to Google and simply type Assignment of Benefits in the search bar to view several articles.
Here are some great resources as well: