If your home was damaged in hurricane Michael or due to another weather event, the process of getting your home repaired and getting your insurance claim settled can involve multiple steps, and multiple parties. You may need to get a quote from a contractor, may need to speak to your insurance adjuster and have your insurance adjuster review damages and estimates, and may receive payments for your damages in multiple payments. Finally, you may even need to negotiate with your adjuster if the estimated settlement is lower than the estimate a contractor provides you.
One issue that has arisen in homeowner’s insurance litigation is assignment of benefits (AOB) issues. An assignment of benefits is a contract that a homeowner might be asked to sign by a contractor or other repair company that allows the contractor or repair company to negotiate directly with the homeowner’s insurance company for money. Some homeowners might sign an AOB thinking that it will save them the hassle of having to negotiate directly with their homeowner’s insurance. Homeowners who don’t want to have to front the money to pay for repairs or who cannot afford to pay for repairs out of pocket while they wait for their homeowner’s insurance company to pay them a settlement might be tempted to sign an AOB. However, homeowners may not be aware that their insurance may be able to send them a first check to get repairs started, and may be able to assist them, without the need to sign an AOB. While signing an AOB might sound like a good idea in the short term, it could potentially create legal issues later. If the contractor’s costs exceed what the insurance company is willing to pay, the homeowner could find themselves in a tough situation.
According to the Florida Office of Insurance Regulation, if the contractor and your insurance company end up in a dispute about the charges the contractor is sending for payment to your insurance company, you, as the homeowner and holder of the policy could end up being named as a party in the lawsuit between the contractor and the insurance company. If the insurance company fails to pay the contractor the full amount owed, you as the homeowner could be held liable for paying the difference. At that point, you could either end up having to litigate, or be forced to pay the difference. If you cannot pay the difference, the Florida Office of Insurance Regulation notes that a lien could be placed on your home.
Are you facing difficulties because you signed an AOB (assignment of benefits)? Are you stuck in the middle of a dispute between your insurance company and contractors? Leader, Leader, & Zucker, PLLC is an insurance claims law firm in Fort Lauderdale, Florida that may be able to assist you.
Before You Sign an AOB: Warnings and Precautions
According to the Florida Office of Insurance Regulation, an AOB is a contract that lets a contractor like a roofing company, plumber, or other contractor negotiate for payment directly with your insurance company. The AOB may require that homeowners leave the communication and negotiation for insurance payment up to the contractor. This might all sound like a great deal, especially for homeowners who may not want the hassle of having to make an insurance claim and for homeowners who just want their home to be repaired. However, the Florida Office of Insurance Regulation notes that homeowners should take precautions before signing these documents because these documents are binding contracts, and homeowners could find themselves liable for expenses if their insurance company doesn’t pay the cost of repairs. Homeowners may want to review their homeowner’s insurance policy, contact their insurance company before signing an AOB, and should take precautions with documents that allow the claim to go directly to the contractor. Homeowners should take special precaution before signing any documents with blanks in the form. According to the Insurance Journal, Florida lawmakers are considering regulation regarding AOBs because these forms have created some complex legal issues and insurance companies claim that these forms have raised their costs.
Some homeowners have also become the victims of fraud after signing an AOB. Contractors sometimes promised to make repairs, but after the homeowner signed the AOB, contractors didn’t make the repairs they promised to make. Before signing any document, homeowners might want to either speak to their insurance company or consult with a lawyer because they could be signing away important rights.
If you have already signed an AOB and find yourself in the middle of a dispute, you are not alone. Leader, Leader, & Zucker, PLLC is a Fort Lauderdale, Florida insurance claim law firm that may be able to assist you. Contact us today or reach out to USAttorneys.com to get connected with a lawyer at our law firm.