Dick Tutwiler posted an interesting perspective regarding assignment of property insurance claims in Florida Property Insurance Legislative Wrap 2015 – We made it through another year unscathed or did we? Here is his perspective:
[T]wo issues stand out for me that deserve some comment. The first is the assignments of benefit, also known as the AOB controversy. I simply don’t understand why the Florida Legislature doesn’t get that this practice of an “assignment of benefits” is just a bad idea. Think about it. Are we comfortable allowing some folks to highjack a property insurance policy they did not pay for nor the insurance company agree to them being a de facto insured with a simple signed piece of paper? And yes, I am well aware of the ability to assign a claim post loss, but not the whole policy! Take a look at one AOB language found in a just released Florida appellate court decision:
“I, the Owner, hereby assign any and all insurance rights, benefits, and proceeds under any applicable insurance policies to One Call. I make this assignment in consideration of One Call’s agreement to perform services and supply materials and otherwise perform its obligations under this contract, including One Call’s not requiring full payment at the time of service. I intend to transfer all insurance rights to One Call, including any causes of action, which exist or may exist in the future.”
I don’t know about you, but the “transfer all insurance rights…including any causes of action which exist or may exist in the future” is more than a little scary to me.
I do not know about such an assignment being “scary,” but it appears overreaching in most cases for a restoration contractor to take an assignment for more than what he does. Most restoration contractors should have no claim to contents benefits, additional living expenses or other benefits that are greater than and pertain to the work performed. Yet, this is the assignment regularly obtained from policyholders.
I agree with Sean Shaw that the assignment of benefits issue is not such a “crisis” issue as the insurance industry makes it out to be. Yet, I agree with Dick Tutwiler. Given the complexity of the concept of assigning contract benefits and the obvious overreaching that can take place with a very vulnerable insured, a simple law preventing a contractor or property insurance vendor from obtaining an assignment of rights and benefits greater than those contemplated to be given in return by the contractor should be Florida public policy.
Positive Thought For The Day:
When you are courting a nice girl an hour seems like a second. When you sit on a red-hot cinder a second seems like an hour. That’s relativity.