Restoration contractors peeved at appeal court’s AOB ruling

assignment of benefits2

The Restoration Association of Florida on Thursday decried an appellate court ruling allowing insurance companies to require co-insured parties and banks holding mortgages to sign off on assignment of benefits agreements.

The association “is deeply disappointed by Wednesday’s decision by the 4th District Court of Appeals, which will further hinder and delay a homeowner’s ability to make timely repairs to their own homes,” spokeswoman Amanda Prater said in a written statement.

“Mortgage companies are not equipped, qualified, or trained in homeowner insurance claims, nor should they be,” she said.

“The primary focus after a homeowner suffers a loss to their property should be to ensure timely professional repairs are made to further mitigate damages and to keep homeowners safe in their own homes.”

The 4th DCA ruled that the restriction, contained in a homeowner’s policy issued by Royal Ark Insurance Co., complied with a 1917 Florida Supreme Court precedent upholding the “well-settled rule that the provision in a policy relative to the consent of the insurer to the transfer of an interest therein does not apply to an assignment after loss.”

Nothing in the high court’s ruling, the 4th District reasoned, precluded insurers from requiring co-insureds or mortgagees to sign off on assignment of benefits, or AOB, agreements.

Prater noted that the 5th District Court of Appeal forbade a similar policy restriction as recently as December. That lawsuit, filed by the Security First Insurance Co., named the Florida Office of Insurance Regulation, which has also disfavored the practice.

“The court ruled in favor of the OIR and disallowed the language from further injuring homeowners after already having to experience one disaster,” Prater said.

“At the end of the day, this is placing limits on a constitutional right that will only serve to harm homeowners and give insurance companies even greater power.”

Staff Reports


  • Roberto Supertino

    September 6, 2018 at 10:08 pm

    What a joke. It is hard enough to get repairs started when there are mortgage companies on the reconstruction check. We have an entire staff that their only focus is mortgage processing. The AOB ia constantly under fire but a doctor can utilize it at will. This is another win for the insurance companies but the insured will suffer the most as always.

    • Vero resident

      September 12, 2018 at 12:11 pm

      Anything that will stop the rate increases that come as a result of these assignment of benefit claims will be welcome. AOB benefits unscrupulous contracts and sleazy lawyers, perhaps the occasional less than honest homeowner who wants a new kitchen to replace his 20-year old one, without paying for it. Meanwhile the rest of us in the state pay higher premiums.

  • Jason Chrarpol

    September 7, 2018 at 5:43 pm

    I’m actually glad for this. As a consumer, I signed an AOB to a contractor and I was left high and dry. What I did not know is that an assignment of benefits completely removed me from my own insurance policy as a named insured. The insurance company could no longer talk to me since I was no longer on the policy for the claim. The contractor owned the claim. The contractor overbilled the insurance company by 75% for work! Since the insurance company did not pay this, they went into litigation. Six months worth of litigation. And guess who is left without any repairs? Me, that’s who….

  • Saul Cimbler

    September 8, 2018 at 2:58 pm

    It is NOT a final decision, as the insured has the right to seek a re-hearing; additionally, its is only binding in the 4th District, meaning in Broward County. This court “Certified a Conflict” to the Florida Supreme Court, which means that the Supreme Court must reconcile this case with the existing case law. It will be close to a year before this issue is settled. In the meantime, consult your attorneys for the right way to proceed. I predict that not all carrier will adopt this case decision until the Supreme Court rules on the issue.

    Saul Cimbler, Certified Insurance Umpire
    Tel: 786 286 1100
    email:[email protected]

Comments are closed.


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