homeowners insurance

Being a Florida homeowner can come with a lot of risks – a lot of them being weather related. After any major storm. you may need work done to repair damage to your home. But, before you hire a contractor, there are things you need to be aware of. Check out this list of important information regarding an Assignment of Benefits, and make sure you’re prepared before you sign an agreement.

What is an AOB?

An Assignment of Benefits is an agreement between you and a third party where you transfer your rights, benefits and financial interest in an insurance policy claim to another party. It is commonly used when hiring a contractor, roofer or water mitigation company to make repairs to your property. Once the Assignment of Benefits is complete, your insurance company must make payments directly to the party completing repairs and you lose the ability to deal directly with your insurance company for your claim.  This is a legal arrangement but can allow unscrupulous contractors to submit improper claims, causing legal battles to ensue.  You should ALWAYS contact your insurance company to notify them of damages before taking any action to make permanent repairs after a storm. You can avoid the risk of this happening to you by recognizing warning signs and following some simple guidelines.

Warning Signs of AOB Seekers

  • Someone knocks on your door to let you know you have damage you weren’t aware of
  • Contract contains the words “Assignment of Benefit”
  • A contractor that offers free services such as remodeling other areas of your home not affected by damage
  • The Vendor offers to handle your claim and pay your deductible for you
  • Vendors that show up immediately following major storms that affect your neighborhood

Prior to Signing Contract

  • Call your Southern Oak Claims Department, notify them of your damage and let them know a vendor has contacted you
  • Do NOT begin any permanent repairs before you have notified your insurance company or allowed them to inspect damages
  • Before agreeing to third party repairs, request everything in writing, including total cost, scope of project, and timeline
  • Look very carefully for any “Assignment of Benefits” language and if possible have someone else review the agreement with you as well
  • Get more than one repair estimate and never feel pressured to decide immediately
  • Always ensure that the vendor is licensed and it’s always a good idea to request references

What if you do sign an AOB?

  • Any benefits received from your claim payments will go directly to the third party and not you
  • You lose all decision making ability about how the damage will be repaired and how long it will take

If you feel that something isn’t right regarding your AOB, please contact Southern Oak immediately.

Want to learn more about Assignment of Benefits? Click the image below to download our flyer, filled with information to answer any questions.