Florida’s Fourth District Court Of Appeal ruled last week that assignment of benefits (AOB) arrangements may only be valid if they are signed by all parties to an insurance policy, which would include mortgagees, Law360 reports.
The court upheld provisions in a policy issued by Ark Royal Insurance Co. that required all named parties to sign the arrangement for it to be valid. The policy named two household members and a bank, but only one person on the policy signed over insurance benefits. The court said all insureds and mortgagees have “a vested interest that a reputable, legitimate third-party contractor perform repairs on the home.”
The Florida Insurance Commissioner recently said that “AOB abuse has contributed to rising insurance rates and in some cases, unscrupulous contractors have left homeowners with unfinished repairs, liens against their homes and uncovered repair expenses.”