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Understanding Assignment of Benefits

We’ve talked a lot about assignment of benefits (AOB), and today we’re telling you more about what it is. AOB is a legal tool where a third party can be paid for the services performed for a homeowner with who is insured. When the homeowner signs an AOB contract, they give up the right to manage the claim as well as control the amount of time and the satisfaction with the repair. While AOB cases are generally not fraudulent, AOB fraud is a major problem.

In a normal AOB scenario, the homeowner would receive reimbursement from their insurance company once the claim is made. For homeowners that are dealing with extensive damage due to a major disaster, this can be helpful as they are not forced to deal directly with the insurance. However, the system is being taken advantage of as contractors overcharge the insurance companies by creating estimates that do not reflect work that’s been done or by making repairs that are unnecessary. Should the insurance company refuse to pay the entire amount, the contractor may go after the homeowner to obtain the difference.

Do your homework before signing an AOB agreement. If the contractor appears to be making promises that are unrealistic, that may be a warning sign. If the insurance company isn’t giving you the money you need to take care of your damage, there may be legal options available to you.

This information is provided by Miami insurance attorney Alonso & Perez, LLP. Our areas of practice include bankruptcy, insurance litigation, foreclosure defense, immigration law, and more. Call 305-676-7545 to speak with one of our attorneys such as our Miami bankruptcy lawyer and receive a free consultation We look forward to working with you.

This information is provided for educational or informational purposes only and should not be construed as legal advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice.