The holiday season is a time full of joy and cheer! The family comes into town, all your favorite cheesy movies are on Hallmark again, and you get an excuse to wear those weird ugly sweaters you secretly adore. But with the holiday season comes the inevitable family crisis.
This year was the year Tony, decided he was finally going to mix it up and fry that turkey. Not only is this the ultimate Dad move, but it is also one that never seems to go well. Anyways back to Tony, he notices the turkey isn’t completely thawed so this bird really heats up when Tony drops it into the oil. During frying the un-thawed turkey reaches its breaking point and explodes, creating a fire which quickly spreads from the patio to the entire house. Tony’s wife Jenny freaks out and immediately calls the fire department.
Strangely enough the next people to show up isn’t the fire truck Jenny was expecting, but a restoration company. Jenny asks them how they knew there was a fire being put out and comes to find that they get notified whenever the fire department is called.
“We can get this cleaned up right now, we just need you to sign this form and we will get this taken care of.” It seemed like a Thanksgiving miracle, so the couple signed the forms, little did they know they just signed away control to all aspects of their insurance claim.
AOB-Assignment of Benefits is the name coined to an agreement that once signed transfers the insurance claims rights and benefits of your insurance policy to a third party. An AOB gives the third party (in this case the restoration company) authority to file a claim, make repair decisions and collect insurance payments without your involvement.
Here are some of the issues that can arise for homeowners when they sign an AOB:
» With some AOB’s the insurance company may only be able to communicate with the third party involved so the homeowners will have no idea what is going on with the claim
» The third party might have the ability to endorse checks on behalf of the homeowner
» The third party may have the rights to file a lawsuit against the insurance company without informing the homeowners
» The homeowner may be subject to financial fees for failing to comply with the terms laid out in the AOB
AOB’s are on the rise in Florida, causing insurance rates to be on the rise as well. The best way for homeowners to avoid falling into this trap is to stay informed, make sure you are reading any contracts presented to you before signing, and contact your agent or insurance company whenever you have any questions.