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Assignment of Benefits (AOB)…Understanding an Insurance Claim

| Robert Patton |

Assignment of Benefits (AOB) is an agreement that, when signed, transfers the insurance claims rights or benefits of the policy to a third party.  An AOB gives the third party authority to file a claim, make repair decisions and collect insurance payments without the involvement of the homeowner.

AOBs are commonly used in homeowners’ insurance claims by water remediation companies and roofing contractors.  Be aware that by signing an AOB, you are transferring your insurance rights over to the contractor which allows them to collect money paid-out from your insurance company on your behalf.

The Association has seen contractors that file fraudulent claims, perform shoddy repair work that is not up to code, or not perform the work at all.   Always read the contract with a service provider to ensure it does not include AOB language.  Call your insurance company, or attorney, to learn more or if you suspect you have signed a contract with AOB language.