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Assignment of Benefits

Learn About Assignment of Benefits In A Property Damage Claim in Florida

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FAQ: What Is An Assignment Of Benefits In A Florida Property Damage Case?

Once the claims process begins following property damage, property owners are mandated under most insurance policies to comply with “post-loss obligations.” Failure to abide by these mandates could provide a reason for the insurer to deny or delay your claim.

A main post-loss obligation in property damage cases is the duty to mitigate damages. In other words, maintaining water damage to prevent the buildup of mold, or managing roof holes and broken windows. Maintenance such as these prevents the home from worsening in state as the insurance company reviews the claim and assessments from the initial damage.

This can put homeowners in a complicated situation. How do you pay a contractor to make immediate repairs while waiting for reimbursement on behalf of the insurer? The solution is typically an "Assignment of Benefits" agreement with the contractor.

The answer to this dilemma is often an “Assignment of Benefits” agreement with the contractor.

Contact one of our Florida Property Damage Attorneys for more information on Assignment of Benefits agreements in a Florida property damage case!

What is an Assignment of Benefits?

In the State of Florida, an  "Assignment of Benefits" in a property damage claim is a signed and legally binding agreement that transfers certain rights or benefits of your insurance policy to a third party – usually, the company or contractor involved with repairs. contractor or restoration company involved with repairs. The Assignment of Benefits (AOB) extends this third party authority to make file claims, make repair decisions, and receive insurance payments without your direct involvement.

An AOB agreement must have a written, itemized, per-unit cost estimate of services to be performed by the third-party assignee. It must also relate strictly to services required to repair, protect, restore, or replace a structure – or to mitigate additional damage to the affected property. Florida’s Assignment of Benefits law includes language and provisions that must always be included in these agreements.

The agreement should also refrain from holding harmless the homeowner from losses, damages, or costs, if their insurance policy prohibits assignments of benefits. Additionally, it should also prohibit the third-party assignee from seeking costs from the homeowner that exceed what their policy's deductible would be.

In Florida, an AOB cannot permit the assignee from charging the homeowner a check processing fee, an administrative fee, a cancellation fee, or a mortgage processing fee. 

Contact one of our Florida Property Damage Attorneys to learn more about an AOB in the State of Florida! 

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Why Would I Need A Lawyer Before Signing An Assignment of Benefits Contract?

In areas such as the State of Florida, meeting with an Assignment of Benefits attorney prior to signing an AOB contract is crucial. Since insurance companies are anticipating a repayment, the contractors holding the benefits from your contract may cease repairs until said costs are covered.  

Furthermore, you may be held  become responsible for the total costs of the repairs if your insurance company denies the claim altogether, due to a technicality in your policy’s agreement.


Contact one of our Florida Property Damage Attorneys for assistance prior to signing an Assignment of Benefit contract!  

Are Insurance Companies Legally Allowed To Deny Assignment of Benefits Claims In Florida?

In December 2018, the Florida Supreme Court accepted the review of a case involving Assignment of Benefits restrictions, and whether or not they should be included in homeowner’s policies in Florida.

The mentioned case claims that the insurance policy in question states that “all” insureds, additional insureds, and mortgagee(s) noted in the policy must sign the Assignment of Benefits before it can be put into motion.

In this particular scenario, the wife was the individual who had signed the AOB; the husband did not do so, despite his name being present on the policy and mortgage  — as said by the insurance company. As a result, AOB cases and the way in which they are handled have changed, further requiring the representation of a property damage attorney before the contract is signed. 

Contact one of our Florida Property Damage Attorneys for assistance prior to signing an Assignment of Benefit contract! 

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What If I Have Already Signed An Assignment of Benefits Contract In Florida?

If you have already signed the contract, the control of the rights and benefits provided by your policy in resolving the claim may belong to the third-party contractor. Get in touch with Florida Property Damage Attorneys today and allow us to review your contract while providing the necessary legal representation you need to ensure the agreement is being fulfilled.

The breakdown in AOB contracts usually begins with the insurance policyholder, seeing that most insurance companies are not in a hurry to pay a claim. Additionally, insurance companies are claiming that third-party contractors are taking advantage of their position as the collector, and oftentimes reluctant to pay the full amount for your repairs.

Here at Florida Property Damage Attorneys, we specialize in protecting your rights against large insurance companies and third-party contractors. If you need any assistance in signing an AOB or opening a property damage case, call us today for a free consultation.

Contact one of the Florida Property Damage Attorneys to offer you in protection and advising in your property damage claim. 

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Common Causes of Assignment of Benefit Issues
Complications with an AOB usually come up when the insurance provider denies compensating both the third party and the policyholder for an insurance claim. As a homeowner, you purchase an insurance policy from an insurance provider to any possible property damages. When your home is damaged calls for emergency repairs and protection, a contractor would e hired through the service agreement in the AOB.  
Following the completion of work and repairs, the contractor would directly file a claim with your insurance company for payment.  As the homeowner, you would make a  separate claim to your insurer for the property's damages. Once your provider receives your claims, an inspection of your home would be completed on behalf of the provider to determine the coverage of the claimed damages. Additionally, an evaluation of the work done by the contractor would be completed to make a final decision on your claim.
An issue can arise here if your insurance company is unwilling or not ready to pay for your property damages or emergency repairs. According to Florida law, the homeowner and contractor have the right to sue the insurance provider. The attorneys at Florida Property Damage Attorneys can support you in filing a lawsuit against your provider. 
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