Assignment of Benefits: Know What You’re Signing!
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Imagine coming home from a weekend away, walking into your house and stepping in a puddle of water.  In a panic, you grab your phone, do a Google search for water damage and call the first company that is listed.  They show up a bit later, hand you a clipboard with some papers to sign, place several fans around the room, tell you that they understand how stressful this is but don’t worry because they will contact your insurance company to file the claim and deal with it on your behalf.

What about that knock at your door from a roofing contractor that just “happened to be” driving by and noticed that you had a missing shingle.  He climbs onto your roof to find damage you didn’t even know you had saying you should have a new roof and he’s going to make your insurance company pay for it; just sign this form authorizing him to talk to your company.

While it may sound like a relief to have a contractor like that, those are just two instances of insurance fraud from a growing trend known as “Assignment of Benefits” (AOB).  This kind of insurance abuse of inflating costs or charging for unnecessary repairs has led to unscrupulous lawsuits.  As time moves on, this can cause homeowners to end up paying higher insurance premiums.  

The majority of our agents at Niceville Insurance Agency have grown up here in the area so we know a lot of really great people.  Although the AOB is on the rise in South Florida, we want to prevent it from spreading to the Niceville / Fort Walton Beach / Destin area.  Let’s take a look at AOB’s and what you need to keep an eye out for.

What is an Assignment of Benefit?

It is a legal agreement between you and another party, forfeiting all insurance rights including monetary compensation and dealing with your own adjuster.  Mostly used by roofers, plumbers and those in the water extraction industries, they “price gouge” the insurance companies, create a lawsuit from your claim if they are not paid the exaggerated costs and could put a lien on your property if the suit is not settled.

Warning Signs of AOB Contractors…

  • Offers to remodel additional areas or to pay your deductible
  • Vendor  arrives to area after localized damage
  • Contract contains the words Assignment of Benefits

Why you should call your insurance company first…

Insurance companies usually have preferred contractors that have been evaluated to have a proven track record of being professional, having courteous service, agree to meet client within a certain amount of time and will not require you to sign an AOB.  In most instances, the insurance company will schedule the contractor while filing your claim.  

Before signing any work contract…

  • Request everything in writing – total coast, scope of project and timeline.
  • Look carefully for AOB wording
  • Do not feel pressured to make an immediate decision

Don’t forget, if you ever have any questions about a possible claim, call us here at Niceville Insurance Agency and we will be more than happy to help you.


About Niceville Insurance

Niceville Insurance Agency has been proudly serving our local communities since 1995. Our specialty has been delivering insurance solutions for individuals, families and businesses throughout Northwest Florida. Contact us for a no hassle insurance quote today!

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