ASSIGNMENT OF BENEFITS
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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