ASSIGNMENT OF BENEFITS

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 ASSIGNMENT OF BENEFITS


            Assignment of Benefits is a commonly used tool by water, fire/smoke restoration and resolution contractors.  Assignments of Benefits is typically a written contract proposal form for the restoration contractor and has become the standard method for guaranteeing payment by the homeowner’s insurance carrier.
            Assignment of post-loss benefits have been recognized in Florida since 1917, as set forth in the Florida Supreme Court’s decision in West Florida Grocery Co. v. Teutonia Fire Ins. Co., 77 So. 209 (Fla. 1917).     
            Florida’s Second District Court of Appeal recently upheld the ability of a policyholder insured to make multiple assignments under a homeowner’s insurance policy.  Nicon Construction v. Homeowners Choice Property and Casualty Insurance Company cite involved a policyholder’s issuing assignments of benefits to separate restoration and reconstruction vendors.  The insurer argued that upon the policyholder’s assigning the policy rights to the first restoration vendor, there were no further rights to be assigned to the second reconstruction vendor.  The circuit court agreed with the insurer and the 2nd reconstruction vendor filed an appeal to the 2nd DCA.
The 2nd DCA reversed the trial court and found that both assignments were valid.  The Court reasoned that the assignments should be understood as pertaining only to the rights associated with each vendor’s respective services.  Thus, if multiple services are required in connection with a claim, the policyholder can assign rights to multiple vendors.
This ruling now allows customers to assign multiple aspects of a restoration to multiple vendors. The vendors can then file multiple suits to enforce the assignments and collect attorney’s fees and cost as permitted under the insurance policy and applicable Florida Law.
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