At D’Amico & Associates, we understand the need to make sure you are protected from unwanted situations regarding potential litigation. As we close out this year, we wanted to shed some light on the reality of an Assignment of Benefits (AOB). When you sign an AOB, you give a contractor or roofer keys to your insurance policy and lose control over the direction of your claim.
What Is an AOB?
An Assignment of Benefits, more commonly known as an AOB, is an agreement contract signed by a policyholder. It enables a third party to file an insurance claim, make repair decisions, and directly bill an insurer on the policyholder’s behalf, usually a contractor. The Insurance Information Institute (III) defines an AOB as “an efficient and client-friendly way to settle a claim”, but many do not know before they sign that this isn’t always true.
When you sign an Assignment of Benefits form, you are no longer able to collect any payments from the insurance company or communicate with them regarding the claim. Your signature on the AOB has given your rights as the insured over to the contractor entirely. In recent years, AOB agreements have hit the headlines as a fraudulent playground. Contractors and restoration companies are abusing the practice by inflating claim costs and charging insurance companies for work that was not necessary, or not completed at all. In addition, because the monies are paid directly to the contractor from the insurance company, you have no leverage to ensure that the work on your property is completed to a satisfactory level.
When things go wrong with an AOB, a claim could be deemed void, leaving the policyholder with a potentially significant financial loss. Within the last 15 years, AOB lawsuit fraud has spread all across the state of Florida. Even if you have already signed your AOB, D’Amico & Associates has put together measures you can take to protect yourself from the fraudulent side of this agreement.
How to Protect Yourself Against AOBs
So, how can you protect yourself against an AOB scam, or fraudulent behavior? Below, we have provided simple yet effective measures to help you avoid falling victim to AOB abuse.
• Contact your insurance company – When your home suffers from unexpected damage, contact your insurance agent or insurance company first. They are in the best position to assist you quickly and are contractually responsible to you.
• Documentation – It is important to document all of your damaged property by taking photographs or videoed evidence. When the immediate emergency is mitigated, do not allow the vendor to begin any significant repairs until your insurance company has inspected the damage. This action will help you avoid jeopardizing coverage under your policy.
• Third Parties – Third parties should not be allowed to be the first person to contact your insurance company for you. Your duty beneath your insurance policy is to contact your insurer.
• No Signature Needed – You do not need to sign an AOB to have your insurance claim processed or have the damage repaired. If your repair vendor is informing you otherwise, it is incorrect.
D’Amico & Associates is dedicated to making sure you and your insurance policy is safe from any fraudulent behavior or scam. By taking these crucial steps, you could also be protecting yourself from litigation and future rate increases. If you are looking for an agent that is transparent and honest with you every step of the way, contact one of our experts today!