Dealing with issues like a broken pipe leaking water damaging your property or mold growing in your home from water leaks is quite a stressful experience on its own. Imagine having to negotiate an insurance claim, to have those repairs made which further adds to the stress.
However, you can easily prevent a taxing situation from getting worse by signing an Assignment of Benefits.
Assignment of Benefits is commonly referred to as AOB and is best described as a fast and cost efficient way to hire a water extraction company to start cleaning up your property, after you home has been damaged .
Essentially, AOBs allow home-repair contractors to bill your insurance company directly while requiring nothing out-of-pocket from you after your home has been damaged.
For example: A pipe breaks in your home and floods your kitchen and bedroom. You call someone to extract the water & dry your home. With an AOB, that water mitigation company will provide services to you without upfront payment since they will recover their fee from the insurance company directly.
AOB is a legally binding contractual agreement or document that is signed by a policyholder to enable the transfer of the insurance claims benefits or policy rights to a third-party contractor, letting them step in your shoes.
The homeowner does not “sign away control” of his/her claim by signing an AOB. The only thing an AOB does is to allow your contractor to bill your insurance company directly. The third-party home- repair contractor has all the rights to make repair decisions, file claims, collect insurance payments, as well as bill an insurer on behalf of the policyholder.
Take the water pipe leak example from earlier.
Once you sign an AOB after calling a restoration company to make the required repairs, the agreement transfers your insurance rights for the specified services performed to the respective company. The third party restoration company will then proceed to file insurance claims on your behalf and will also receive the payment directly from the insurance company and not you.
Major Responsibilities of the Third Party Assignee Under An Assignment of Benefits
When you sign an Agreement of Benefits and transfer insurance rights and benefits to a third party, they are required to perform certain responsibilities under the signed agreement.
These include:
- The assignee must be able to provide a copy of the AOB to the policyholder’s insurance company within a period of 3 working days from either the date following the execution, or three days from when the work commences.
- The assignee must be willing to fulfill certain policyholder duties demanded by the policy. These primarily include providing the insurance company with any documents or records they request that are related to the services provided, taking responsibility for maintaining records of all services given by the provider, and lastly, cooperating with the claim investigation done by the insurance company.
- Allows a ten (10) recission period for the named insureds to cancel the contract with the vendor.
- If the insurance company ultimately does not pay the AOB vendor then he AOB can not collect the outstanding bill from the AOB vendor.
What to Do If You’ve Suffered Property Damage
In case of property damage, always take a moment to document the damage by taking photos before mitigating the damage.
Then, if you wish to sign an AOB with the repair company, make sure to review it thoroughly before you sign the contract. Do not sign a contract with blank spaces. Do not sign a AOB that you yourself do not understand. If you are not sure about how to interpret the AOB contract being given to you do not rely on the contractor to interpret the language for you. Similarly, if you are not sure about how to interpret your policy do not rely on the contractor to interpret the insurance policy language. In that event contact a CLO Property Damage Attorney with your questions.
Final Word
AOBs are a valuable tool that allow the homeowner to get work done on their home without upfront payment. Without AOBs, how will someone quickly remove the water to their home immediately after a pipe breaks or remove the smoke after a fire without having to first pay a big bill .
If you have sustained any kind of damage to your property and have been given the runaround with your insurance company, or if you have any questions about signing an AOB contract, immediately contact Mordechai Breier Esq., the founder of CLO, at 305-940-0924 for a free consultation and policy review. At Consumer Law Office, property damage claims are all we do. We have helped over a thousand homeowners just like you in their insurance coverage disputes through strategic negotiation, mediation, and litigation.
Call us today for a free consultation and experience the benefits of having a team of knowledgeable Property Damage Attorneys dedicated to standing up for your rights and helping you get reimbursement on your covered loss
