What is an AOB?
- Assignment of benefits is a document that, once signed, transfers the power of the insured party from the policyholder to a separate third party of choice. This third-party could be a roofer, a plumber, a contractor, or other such service-driven company.
Here’s the Problem:
- By signing an AOB you are essentially signing your rights away as the insured. This puts the ball in your contractor’s court and allows them to make all decisions when it comes to your insurance claim. Rather than filing your insurance claim directly with your carrier, which is always an option, you are handing all of your rights and any potential payouts over to your vendor of choice. This type of legal agreement creates quite a few risks for the policyholder:
- Since this is a legally binding document, it is nearly impossible to backout of.
- The vendor placed in charge of claim can choose to complete the job as cheap as they can in order to pocket the remainder of the insurance payout.
- The entire claims process can be slowed down tremendously as the third-party will often dispute the claim in order to maximize insurance payout.
- You can find yourself personally responsible for added costs not covered by the insurance policy.
- You can be held legally responsible if vendor and insurance company choose to take their cost dispute to a higher legal power. Choose to file your claim directly with your carrier, ensuring that you remain in control of any funds dispersed through your insurance company.
How to Avoid AOB Complications:
- If you do wish to sign an AOB, contact your insurance company first and ensure that you understand your rights and responsibilities after damage is inflicted upon your property.
- Team up with an independent agent who has your back, (that’s us!), and can assist you in your claim filing process!
We never want you to feel lost or taken advantage of, especially after damage or loss, so please feel free to contact us with any questions or concerns before signing any dotted line.