What is an Assignment of Benefits?
An Assignment of Benefits, or “AOB”, is a contract that gives the rights of your insurance claim or the benefits of your insurance policy to a third-party vendor such as a roofing contractor or a public adjuster.
Filing an insurance claim can be challenging. An assignment of benefits agreement may seem like a good idea. Especially if contractors make all kinds of promises to homeowners.
However, once the AOB is signed, it gives the roofing contractor the ability to file a claim, make decisions regarding the repair or replacement of your roof, and collect insurance payments — all without you being involved.
- The roofer will have the rights and benefits of your insurance policy.
- The insurance company will only communicate with the roofer regarding the claim.
- You won’t have any say or be able to make any decisions regarding the claim.
- The roofer will be able to file suit against your insurer without your knowledge, and you would be named as a party in the lawsuit.
- The roofer could endorse checks on your behalf.
- A roofer can inflate the cost and sue you for any unpaid costs your insurance company did not pay; or they can file a lien on your home in an attempt to collect.
- All of this can lead to higher insurance premium costs.
Unfortunately, unscrupulous roofing companies pressure people to sign AOBs, especially after a storm or hurricane when they go house-to-house claiming to do all the repairs and roof replacements for free if they have homeowners insurance. The result is homeowners lose the right to work directly with their own insurance company, and in many cases the roofing company will not complete the roof replacement or repairs in the time promised and the homeowner is left with no way to get out of the contract.
Here are a few tips to consider which can protect you:
- Do not sign documents on the spot or under pressure– any legitimate roofing company will not pressure you to sign anything, and you are not obligated to sign an AOB to have repairs done.
- Contact your insurance company immediately should the need to file a claim arises– many roofing companies go door-to-door after a storm or hurricane making promises to take care of everything with an AOB, even before many homeowners have contacted their insurance company.
- Remember the saying, “if it’s too good to be true it probably is”– If someone knocks on your door to tell you about damage you didn’t know about and promises a free roof, it is typically a sign of AOB abuse.
- Ask for everything in writing and time to review– If someone makes a claim for something for “free,” ask for it in writing and for time to review all estimates and contracts. Again, do not feel pressured.
- Work with trusted and credible companies– Like any industry, there are bad apples. Make sure anyone you work with has a Florida roofing license, ask them for proof of liability and workers compensation insurance, look them up in the Better Business Bureau (BBB) website to see their rating, their reviews and any complaints against them, look at their website and their social media reviews.