Assignment of Benefits
**Effective January 1, 2023***
Recent legislative changes prohibit a policyholder from assigning any post-loss benefits of a residential or commercial property insurance contract issued or renewed on or after January 1, 2023. Therefore, Assignment of Benefit agreements may not be established for claims made under contracts subject to this new law.
Click here to read more: https://www.myfloridacfo.com/division/consumers/consumerprotections/assignmentofbenefits
Prior to January 1, 2023
Assignment of Benefits
We have been receiving a lot of calls regarding people who signed special agreements and other commitment letters.
Here is what we can share.
If you signed an Assignment of benefits, Florida State Statute 627.7152(2)a2 reads: An assignment agreement must:
Contain a provision that allows the assignor to rescind the assignment agreement without a penalty or fee by submitting a written notice of rescission signed by the assignor to the assignee within 14 days after the execution of the agreement, at least 30 days after the date work on the property is scheduled to commence if the assignee has not substantially performed, or at least 30 days after the execution of the agreement if the agreement does not contain a commencement date and the assignee has not begun substantial work on the property.
From the Florida Department of Financial Services:
What information must be included in an Assignment of Benefits?
The AOB must contain a written, itemized, per-unit cost estimate of the services to be performed by the third-party assignee and it must only relate to the work to be performed for services to protect, repair, restore, or replace a dwelling or structure or to mitigate against further damage to such property.
The AOB must contain a notification in 18-point, uppercase, boldfaced font that advises you that you are giving up certain rights under your insurance policy to a third party. The notification must also include the rescission terms.
The AOB must contain a provision that requires the third-party assignee to indemnify and hold you harmless from all liabilities, damages, losses, and costs (including attorney fees). The execution of the AOB constitutes a waiver by the third-party assignee and its subcontractors of claims against you for payment arising from the AOB. The third-party assignee and its subcontractors may not collect, or attempt to collect money from you, maintain any action of law against you, file a lien against your property or report you to a credit reporting agency.
The AOB prohibits the third-party assignee from seeking payment from you in any amount in excess of the applicable policy deductible unless you have agreed to have additional work performed at your own expense.
The AOB cannot assign the right to recover attorney fees to the third-party assignee. In a suit related to an assignment agreement for claims arising under a residential or commercial property damage, the right to recover attorney fees stays with the assignor.
Florida law prohibits a third-party assignee from including the following charges/fees in an AOB:
A penalty or fee for rescission of the AOB during the timeframes outlined in the AOB.
A check or mortgage processing fee.
A penalty or fee for cancellation of the AOB.
An administrative fee.
If you are concerned with the language or terms of the contract, you should seek legal advice prior to signing the AOB. If you have questions as to whether the AOB incorporates the provisions required by Florida law, you may contact the Florida Department of Financial Services Insurance Consumer Helpline at 877-693-5236.
https://www.myfloridacfo.com/division/consumers/assignmentofbenefits.htm#:~:text=Assignment%20of%20Benefits%20(AOB)%20is,the%20involvement%20of%20the%20homeowner.
If you have questions, please take a moment and watch this video:
http://players.brightcove.net/913730540001/default_default/index.html?videoId=5420640804001