More and more requests are coming in from our readers, and this in this post we are looking at Assignments of Benefits (“AOBs”) in New York.
New York follows the majority of states we have reviewed and permits AOBs when the assignment takes place post-loss. “Upon the occurrence of a loss the claim of the assured is a right to payment—a mere chose in action which may be assigned the same as any other chose in action.”1 Additionally, the AOB is valid despite anti-assignment clauses: “The assignment of a fire insurance policy subsequent to loss is valid regardless of the condition of the policy.”2
New York has even codified their acceptance of AOBs. N.Y. Gen. Oblig. Law § 13–101 – Transfer of Claims, states:
Any claim or demand can be transferred, except in one of the following cases:
- Where it is to recover damages for a personal injury;
- Where it is founded upon a grant, which is made void by a statute of the state; or upon a claim to or interest in real property, a grant of which, by the transferrer, would be void by such a statute;
- Where a transfer thereof is expressly forbidden by: (a) a statute of the state, or (b) a statute of the United States, or (c) would contravene public policy.
Additionally, “the owner of the claim need not use a particular form of assignment,”3 however, “the assignor must ‘manifest an intention to make the assignee the owner of the claim.’”4 Further, New York also permits AOBs to be made orally:
[U]nder New York law an assignment may even be made orally, see Krauss v. Cent. Ins. Co. of Balt., 40 N.Y.S.2d 736, 741 (Sup.Ct.1943) (“[A]n assignment of a chose in action other than a negotiable instrument may be by parol.”), though assignments lacking consideration must be signed and in writing, see N.Y. Gen. Oblig. Law § 5–1107.5
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 at firstname.lastname@example.org.
1 Krauss v. Central Ins. Co. of Baltimore, 40 N.Y.S.2d 736, 741 (Sup.Ct. 1943).
2 Id., citing Courtney v. New York City Ins. Co., 28 Barb. 116 (1858).
3 Digizip.com v. Verizon Services Corp., 2015 WL 1283676 at 3 (S.D.N.Y. 2015).
4 Id., citing Advanced Magnetics, Inc. v. Bayfront Partners, Inc., 106 F.3d 11, 17 (2d Cir.1997).