A valid Assignment of Benefits (“AOB”) grants the holder of the AOB the rights and benefits of the insurance policy-holder. However, insurers do not always honor these binding contracts.
An AOB is a contract entered into between an insurance policy-holder and a third party, which grants the third party the rights and benefits of the insurance policy as it relates to a particular claim. While there are no “magic words” which make an AOB valid, Florida courts have held that there must be an intent on the part of the policy holder and the third party to actually assign the rights and benefits under the policy.
Generally, AOB’s are used by homeowners to have repairs made to their home after suffering damage, whether it be from a water leak, fire damage, or other loss. The homeowner can hire a remediation company to repair the damages at little or no cost to them. All the remediation company asks for in return is for the homeowner to execute an AOB giving the remediation company the right to seek reimbursement from the insurance carrier.
If your company has obtained a valid AOB, but the insurance carrier will not honor it or is offering to pay less than the claim is worth, you may need to consider seeking assistance from an attorney experienced in litigating these matters. AOB litigation has become a hot-button issue in Florida, and the insurance companies are fighting hard to limit the AOB claims being brought against them.