I launched a new blog series last week that will provide our readers with the law in each state concerning Assignments of Benefits (“AOBs”) and their validity and applicability. In response to my first post, I received a request from a reader as to Maryland, so in this post we’re going to look at AOBs in Maryland.
As I stated in my previous post, a Standard HO3 policy includes the following language under the Conditions Clause: “Assignment of this policy will not be valid unless we give our consent,” and where an insurance carrier challenges an AOB, this clause is generally used as the basis for their position that the AOB is invalid.
Concerning AOBs, in Maryland the courts have held:
An assignment otherwise valid and enforceable as a claim against a fire insurance company is not rendered inchoate or invalid because the amount of the claim has not yet been settled between the company and the insured. Such an assignment after loss ‘stands on the same footing as the assignment of a debt or right to recover a sum of money actually due’.1
Further, in 1860, the Court of Appeals of Maryland held:
Where the assured, after loss, assigns his right to recover that loss, such assignment, like that of any other chose in action, gives the assignee an equitable interest and a right to recover, in the name of the assignor, subject to set-off and all other equities.2
While the case law is somewhat sparse, it does appear that AOBs are valid and enforceable in Maryland, so long as the assignment takes place after a loss.
If you have any specific questions on AOBs or would like to see your state come up sooner, please comment below, or send me an email.
As always, I’ll leave you with a (mildly) related tune, here’s Maryland’s own Jimmie’s Chicken Shack with their hit, Do Right:
1 Michigan Fire & Marine Ins. Co. v. Genie Craft Corp., 183 F.Supp. 533, 537 (D.Md. 1960) citing Washington Fire Ins. Co. of Baltimore v. Kelly, 32 Md. 421, 437 (Md. 1870).
2 Whiting v. Independent Mut. Ins. Co., 15 Md. 297, 298 (Md. 1860).