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Florida Case Upholds Assignment of Benefits

Assignment of benefits, wherein homeowners allow contractors or other repairmen to collect settlement funds directly from the insurance company, have become controversial in recent years.  Many have urged that assignment of benefits should not be valid, but a recent Florida case substantiates the practice.  In this case, the insured homeowner signed over his benefits to One Call Property Services to perform repair work after a water leak.  The insurance company, Security First, failed to pay One Call and One Call sued.

This case is one of many attempting to deal with the issue of assignment of benefits.  At Greenberg, Stone & Urbano, our homeowners’ insurance attorneys have assisted several homeowners and repair companies with assignment of benefits matters.  Assignment of benefits are controversial and litigation may alter this practice in coming years. We report on this recent Florida case and offer homeowners some cautions about allowing assignment of benefits.

Florida Court Allows Assignment of Benefits

In this Florida case, the insurance company claimed that the assignment of benefits was invalid and One Call had no standing to bring an action against it.  The insurance company claimed that the policy prohibits assignment of benefits.  Further, the assignment was made before any money was due and before any adjustments were made.

The 4th DCA rejected the insurance company’s arguments.  The court held that case law is well settled and clearly allows for assignment of benefits.  Assignable benefits accrue on the date of the loss, according to the court, even if payment is not yet due or fully assessed.

Homeowners Should Use Caution Before Allowing Assignment of Benefits

Although this Florida court has upheld the assignment of benefits in this case, it is important that homeowners carefully research and consider whether to allow an assignment of benefits following their loss.  Today, an increasing number of homeowners unknowingly sign contracts that assign their insurance settlement to the contractor or repair company.  By signing this agreement, you allow the contractor to directly collect the settlement funds.

While this may seem like an easier process for some homeowners, it comes with risks.  In signing over your benefits, you lose control over the claims process.  This could result in you paying more for your repairs then you would have otherwise.  If the cost to repair exceeds the settlement, you could be liable to pay this sum.  Further, there have been reports of contractors falsely inflating repair costs in order to receive a larger settlement.  This could increase your homeowners’ insurance costs and the costs of others across the state.

If you have questions or concerns about your homeowners’ insurance claim, consult with an attorney as soon as possible. Your attorney can assist you with questions about assignment of benefit and ensure you make the most informed decision.

Contact the Homeowners’ Insurance Attorneys at Greenberg, Stone & Urbano Today For Your Free Consultation!

If you need assistance with a homeowners’ insurance related matter, contact the Miami Homeowners’ Insurance Attorneys at Greenberg, Stone & Urbano. Our skilled and dedicated attorneys will guide you towards the best possible outcome. We have over 130 collective years of experience representing homeowners against their insurers across South Florida and will put our extensive experience to work for you.  Contact our firm as soon as possible to protect your legal rights.  Our firm received an AV rating from Martindale Hubbell and was ranked as a top firm in South Florida by the Miami Herald.  Call us at (888) 499-9700 or (305) 595-2400 or you can visit our website to schedule your initial consultation.

Source:

https://scholar.google.com/scholar_case?case=15662305361326536854&hl=en&as_sdt=6&as_vis=1&oi=scholarr

 

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