The requests from our readers keep coming and in this week’s installment of my blog series on Assignment of Benefits (“AOB”) we are taking a look at California and how AOBs are handled there.
California Insurance Code § 520, states as follows, “[a]n agreement not to transfer the claim of the insured against the insurer after a loss has happened, is void if made before the loss.”
The Supreme Court of California confirmed the enforceability of this statute in the case of Fluor Corp. v. Superior Court of Orange County. There, the court provided an extensive history of case law and statutes in California regarding first and third-party liability insurance policies, and ultimately held:
[A]fter  property damage  resulting in loss occurs within the time limits of the policy, an insurer is precluded from refusing to honor an insured’s assignment of the right to invoke defense or indemnification coverage regarding that loss. This result obtains even without consent by the insurer—and even though the dollar amount of the loss remains unknown or undetermined until established later by a judgment or approved settlement.1
As you can see, this decision follows with the majority of states we have reviewed prior to this, and as long as your assignment takes place after a loss, California permits assignment of benefits without the consent of the insurance carrier and despite any anti-assignment language include in the policy.
If you have specific questions on AOBs or would like to see your state come up sooner, please comment below, or send me an email at email@example.com.
As always, I’ll leave you with a (mildly) related tune, here’s one of my favorites from a quintessential California band, The Beach Boys with Good Vibrations: