Contractor is left to sue the homeowner. With an assignment of benefits the contractor,
the contractor can sue the carrier as the owner of the claim. This is the reason some
insurance companies don’t like AOB. Many homeowners stop fighting with their
insurance company after they are denied and the mediation ends in an impasse. When
the contractor stands in the shoes of the insured, the insurance company may have to
answer to someone who is more savvy about damages and repairs than the average
consumer. Without the right of the benefit to sue, the contractor is only left to enforce
its construction lien on the homeowner.
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It will only result in less vendors being willing to perform the work. Every single homeowner
who uses a competent remediation/restoration professional to have to file a construction lien
with the county. In a large storm setting, this could possibly have the effect of entire
neighborhoods having liens on their homes while awaiting the insurance carrier to make the
proper claim decision and payment to be made to vendor after clearing through mortgage
lender.
Notification of Assignment
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In theory, good practice. I would extend the notice to 5 business days and require all
carriers/subsidiaries of carriers to publish on their website and provide this information to all
interested parties, including non-insureds/vendors.
Additional Review and Enforcement for DFS
The “clearly defined” limitation already exists in the law. 626.854 (16) A licensed contractor
under part I of chapter 489, or a subcontractor, may not adjust a claim on behalf of an insured
unless licensed and compliant as a public adjuster under this chapter. However, the contractor
may discuss or explain a bid for construction or repair of covered property with the residential
property owner who has suffered loss or damage covered by a property insurance policy, or the
insurer of such property, if the contractor is doing so for the usual and customary fees applicable
to the work to be performed as stated in the contract between the contractor and the insured.
This issue is generally raised by the mis-informed when AOB’s are accepted by
contractors/vendors. Carriers – NOT consumers – improperly raise this issue as a defense to
paying lawfully owed bills. A contractor who negotiates a claim that belongs to the contractor by
virtue of the assignment of benefits is NOT doing so, “on behalf of an insured,” but rather on
behalf of itself to be reimbursed/paid for the lawfully owned rights provided under the AOB.
Assignment of Claims and Unauthorized Adjusting of Claims
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 Assignments of benefits for any repairs should be restricted to Coverage A or B of
dwelling policy limits.
 In order to be a valid assignment, the assignee or homeowner must notify the insurance
company in writing within 5 business days the execution of the assignment. All
carriers/subsidiaries of carriers are required to publish this information on their websites and
provide this information to all interested parties, including non-insureds/vendors.
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