What Is An Assignment Of Benefits In A Florida Property Damage Case?
When the unexpected happens and your home sustains damage due to a storm, fire, or other incident, certain steps must be taken as soon as possible. These include notifying your insurance company, getting a claim started, and taking steps to make any immediate repairs.
After property damage occurs and the claims process begins, property owners are required under almost all insurance policies to comply with specific “post-loss obligations.” Failure to follow through with these obligations could give the insurer grounds to delay or deny the claim entirely.
A major post-loss obligation in property damage cases is the duty to mitigate damages. This means addressing water damage to prevent mold buildup, for example, or covering broken windows or holes in roofs. This prevents the home from getting worse as the insurance company reviews the claim and assessments are made of the initial damage.
For homeowners, however, this can put them in a bind. How do you pay a contractor to make immediate repairs while waiting weeks or even months to get reimbursed by their insurer?
The answer to this dilemma is often an “Assignment of Benefits” agreement with the contractor.
What is an Assignment of Benefits?
An Assignment of Benefits in Florida property damage claims is a signed agreement and legally binding agreement that transfers certain rights or benefits of your insurance policy to a third party – typically a contractor or restoration company involved with repairs. The Assignment of Benefits (or “AOB”) gives this third party authority to make repair decisions, file claims, and receive insurance payments without your direct involvement.
A valid Assignment of Benefits agreement must contain a written, itemized, per-unit cost estimate of services to be performed by the third-party assignee. The agreement must relate strictly to services required to protect, repair, restore, or replace a structure – or to mitigate against additional damage to the affected property. Florida’s Assignment of Benefits law contains additional provisions and language that must always be included in these agreements.
The agreement should also indemnify (hold harmless) the homeowner from damages, losses, or costs, if the insurance policy prohibits assignments of benefits. It should also prohibit the third-party assignee from seeking costs from the homeowner beyond what their deductible under the policy would be. In Florida, an Assignment of Benefits cannot permit the assignee from charging the homeowner an administrative fee, check processing fee, cancellation fee, or mortgage processing fee.
When Can an Assignment of Benefits be Useful for a Homeowner?
The main benefit of an Assignment of Benefits to a homeowner is convenience and cost savings. Having the ability to sign over the rights to collect some of an insurance provider’s payout in exchange for time-sensitive (and expensive) repairs is worth it to many homeowners. Not every property owner can afford to shell out hundreds or thousands of dollars right after an incident to cover urgent but necessary repairs. The Assignment of Benefits is an agreement that usually works for the homeowner, the contractor, and the insurance company.
Our Daytona, Florida Property Damage Attorneys Can Help You Evaluate Your Options and See if an Assignment of Benefits Works for You
Wherever you are in the insurance claim process, the Daytona property damage insurance attorneys at Bundza & Rodriguez, P.A., are here to help you discuss your options. We have years of experience working with Florida clients to get the most out of their property damage claims. To learn more, call our Daytona law offices today at 386-252-5170, or schedule a consultation with our Daytona Beach property damage attorneys online.