The 5th District Court of Appeal recently overturned a lower-court decision and ruled in favor of a contractor in a dispute with an insurance company in an assignment of benefits case.
Assignment of benefits ("AOB") cases involve a situation where a property owner who has sustained damage to their property, hires a contractor to mitigate the damages and then assigns their right under their insurance policy to the contractor. See AOB December 5, 2017 post discussing in further detail AOB claims.
The contractor will make a claim directly with the insured property owners insurance company through their AOB.
In this particular case, the insurance company was arguing that the insured property owner needed to get permission from their mortgage company to be able to assign their benefits under their insurance policy.
The main problem with that argument is that in the case of property damage, the insured property owner needs to be able to get professional help immediately to prevent further damage to the property. If their property has a mortgage, having to get approval from their mortgage lender could take days or even weeks, which would cause greater damage to the property and more cost to repair.
The 5th District Court of Appeal reject the insurance company's argument and said that AOBs could not be restricted by requiring mortgage company approval. The appellate court stated that any post-loss assignment restriction is against Florida law.
Again, this is a situation where the Florida Legislature will have the final say regarding AOB claims, but this decision is a victory for insured property owners who want to make sure they can take quick action to protect their property when it sustains damage.