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Can Homeowners Insurance Benefits Be Assigned to a Contractor?

Assigning insurance benefits to a service company or third party contractor can allow homeowners to receive prompt repairs in the wake of a disaster or accident. For example, if a house is flooded due to a burst pipe or tropical storm, the assignment of benefits can allow a water restoration company to seek compensation directly from the homeowner’s insurance company. However, the practice can be vigorously contested by an insurer.

In the event that a dispute occurs, homeowners and third party contractors may be able to take legal action to see that a claim is treated fairly. In several recent decisions, Florida courts have continued to uphold the insured’s right to sign benefits over to contractors in exchange for emergency and mitigating repairs.

In one case, Bioscience West, Inc. v. Gulfstream Prop. & Cas. (Fla. 2d DCA Feb. 5, 2016), the insured secured emergency water removal services from Bioscience, assigning that company her post-loss insurance benefits. State Farm would deny the claim, asserting that the insured required their consent to assign the policy to another party. The case was eventually brought before the Second District Court of Appeal. The court held that while the insured may be restricted from assigning the policy in its entirety, she was not barred from simply assigning post-loss benefits.

Despite recent court rulings, insurance companies may continue to contest payments that involve an insured assigning benefits to a third party for repairs.

Legal Help for Assignment of Benefit Disputes

This case demonstrates that contesting the denial of a claim can require a close examination and detailed understanding of the language in an insured’s policy. If you are currently involved in a dispute with an insurance company that is denying or delaying payment on a claim involving the assignment of benefits, do not hesitate to contact the Morgan Law Group.

Our legal team can help you to understand the terms of a policy as well as what you may expect in the case ahead. Whether you are a homeowner or a contractor who has provided repair services, our Miami insurance attorneys can bring more than 40 years of combined experience to your case.

We work on a contingency fee basis, meaning we don’t see a dime until you do. Call (844) 818-0774 or contact us online today.