TheAssignmentofBenefitscontractprovisioncreatesseveralpotentialchallengesforapolicyholder becauseitgivesservicecompaniestherighttodealdirectlywithyourinsurancecompany WhoisimpactedbyanAssignmentofBen ID: 936711
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Claims-BewareoftheAssignmentofBenefitsProvision! TheAssignmentofBenefitscontractprovisioncreatesseveralpotentialchallengesforapolicyholder becauseitgivesservicecompaniestherighttodealdirectlywithyourinsurancecompany. WhoisimpactedbyanAssignmentofBenefitsprovision? Anypolicyholderthatsuffersapropertylossandhiresremediationservicesandcontractorstohelp withcleanupandrepairs. Anypolicyholderthatsuffersanautomobilelosssuchasawindshieldglassclaim. IfyousignacontractthatincludesanAOBprovision,youhaveassignedyourrighttoclaim proceedstoathirdparty. WhatisanAssignmentofBenefits(AOB)? “AnAssignmentofBenefits(AOB)isalegaltoolthatallowsathirdpartytobepaidforservices performedforaninsuredhomeownerwhowouldnormallybereimbursedbytheinsurancecompany directlyaftermakingaclaim.AOBiscommonlyusedwhenahomeownerexperiencesawaterloss– suchasaleakypipe,anoverflowforasink,oradamagedapplianceandcontactsacontractororwater remediationcompanyforassistance.MostAOBagreementspresentedtothehomeownerallowthe contractortostandintheshoesofthehomeownerforinsurancecollectionpurposes.Somearguethat thislegalarrangementallowsunscrupulouscontractorstooverinflateorsubmitimproperclaims, causinglegalbattlesbetweenthecontractorandtheinsurancecompany,withtheconsumerleftoutof thepicture.” 1 PropertyPolicyScenario: “Acrackedwaterpipefloodsahome.Aplumberfixestheleakandrefers thehomeownertoawaterextractioncompany.Theextractioncompanyassuresthehomeownerit’s theretohelp,promisestotakecareofeverythingincludingbillingtheinsureddirectly,andremindsthe homeownerthatanydelayinsigningcouldleadtodangerousandtoxicmoldgrowth.Theinsuredsigns thecontract,oftenunawareofwhatshehasjustsigned.Theextractioncompanymovesquickly,often wellbeforeinsurancecompanyisabletoinspectdamageorcollectevidence,andsometimesbeforethe insurerisevenawareoftheloss.Theextractorbillstheinsurer$12,000.Theinsurerknowsan extractiononacomparablehousetypicallyrunsabout$3,500andtriestonegotiatewiththecompany. Thecompanyrespondswitha10daynoticeandfilessuitforbreachofcontract;itcanputalienonthe insured’sproperty,andunderFloridalaw,evenforeclose,ofthebillisnotpaid.Infartoomany situations,theinsurerpaystheclaimtoavoidattorneyfees,whichcanmountquicklyinsuch situation.” 2 AutomobilePolicySc
enario: “Acrackedwindshieldoccursonyourautomobilewhileyouaredriving. Youcontactanautoglasscompany,whichofferstodealdirectlywiththedriver’sinsurancecompany. Thedriversignstheassignmentofbenefitsformandthewindshieldisfixed.Similartotheproperty insurancescenario,iftheinsurancecompanyfightstheamountofthewindshieldrepair,thetwosides endupincourtandtheinsurercangetswaddledwithallthelegalfees.Themesscanlandbackin policyholders’lapsiftheyarelistedasaplaintiffinalawsuit,evenunknowingly.” 3 WherewillIfindanAssignmentofBenefitsprovision? MostcontractsdonotutilizeAssignmentofBenefitsterminology,soyouneedtounderstandthe concepttounderstandwhatrightsyouaregivingup. Readanypaperworkthatincludescontractuallanguageverycarefully! HowcantheAssignmentofBenefitsprovisionaffectme? Youcanlosecontroloftheclaimsprocessincludingtherighttonegotiatethepricefortheservice provided. Youlosetherighttoreceivepaymentforyourclaimfromtheinsurancecompany. Youmaystillbeheldliableforpayment,eveniftheinsurancecompanydoesn’tpaythem. Thisarrangementcreatesanopportunityforimproperorinflatedclaimsinvolvingunscrupulous servicesprovidersandtheirattorneys. Improperorinflatedclaimscouldaffectyourinsurancepremiumoryourabilitytoobtaincoverage. Yourclaimcouldresultinliensonyourpropertyifavendorisn’tpaidbytheinsurancecompany. HowdoIprotectmyrights? Pleaserevieweverycontractforservicesrelatedtoyourinsuranceclaimwithyourinsurance companyAdjusterbeforeyousignit! It’simportantforyoutodetermineifanycontractincludesanAssignmentofBenefitsprovision. Thisprovisionisoftenfoundinservicecompanycontracts(roofers,waterextractioncompanies, plumbers,etc.)thatprovidepropertydamageremediationorrepairservicesinvolvinginsurance claims. Whenyouhavealoss,obtainseveraldifferentbidsorestimatesfromdifferentcompaniesand reviewthemforAOBverbiage. IfyouareunsureofthecontractandiftheprovisionforAOBispresent,donotbeafraidtoseekout legalguidanceoradvicefromyourattorney,oryourinsurancecompany. Contactyouragent. 1 AssignmentofBenefits,FloridaDepartmentofFinancialServices,2016 2 AssignmentofBenefitsFAQ,pg.1,FAIA,2017 3 Editorial:Lawmakersignoreinsurancemess.TampaBayTimes,2017 Z01111100-Proposal-10/17 8950FontanaDelSolWay,Suite200,Naples,FL34109 IRMSinc.com·(239)649-1444