Beware of the AOB…..Assignment of Benefits….Avoid this at all cost.


“What is an Assignment of Benefits?”

“An Assignment of Benefits (AOB) is a contract between you and a contractor (such as a plumber, water remediation firm, roofer, etc.) where you give the contractor control of your claims benefits. They file a claim for their services and direct the insurance company to pay them directly.

What’s in it for the contractor?

Once you sign an AOB, you lose control of the direction of your claim. The contractor takes control, and can submit whatever they like to your insurance company, sometimes billing the company two, three, four, five times the going market rate for their services, and sometimes including work that was never performed. You don’t see this, and you can’t verify what they did.

What are the potential pitfalls in signing an AOB?

  • You have committed to this contractor, and you have little to no recourse if you’re not satisfied with their work.
  • You can no longer comparison shop if you are not satisfied with their work. Even if they walk off the job with their work incomplete, they can still claim compensation from the insurance company which gets deducted from your benefits.
  • Both you, and the contractor, are still bound by the terms and conditions of the policy, and if the contractor violates those terms and conditions, those actions could potentially jeopardize coverage for your entire loss.

What’s in it for the contractor?

This is where the age old mantra of “if it seems too good to be true, it probably is,” comes into play.  Has the contractor done any of the following?

  • Solicits a job from you unannounced for damages you didn’t even know were allegedly present?
  • The contractor is offering you something for nothing, such as a free roof or kitchen.
  • Wants to start work immediately and advises you to delay contacting your insurance company?
  • Offered to “take care of” your deductible.

Any of these issues could potentially lead to a fraud investigation which could jeopardize your coverage.

Possible Litigation:

As mentioned above, there is no standard for what the contractor can submit to the insurance company, and if the company questions the scope and/or the pricing submitted by the contractor the company can be sued directly by the contractor.  And while you may not be a party to this lawsuit, more likely than not you will end up being a witness.

What should you do if you have a claim?”

Contact your insurance agent to report the claim.  He can guide you through the process.  Some insurance carriers will have contractors that they have vetted and will recommend.

This article is compliments of Federated National and SWFL Insurance Agency.

Questions or need a Homeowners or Property coverage quote, call 239-265-9577 or email  We are Your Insurance Answer People in SWFL.

Auto Insurance: Clear Coat And Other Coverage Options

Fort Myers is a bustling metropolitan city in Southwest Florida. It is nestled on the coast, providing access to beautiful Gulf beaches. There are many things to see and do, including golfing, shopping, boating, and visiting historic landmarks. Residents are here year-round and through the winter and many tourists come to explore the beaches throughout the year as well.

When you shop for auto insurance in Florida, it’s important to know about the coverage options. What are you covered against? Knowing will ensure you can file a claim if and when your car is involved in any kind of accident.

In Florida, there are minimum requirements for coverage for liability. This includes property damage and personal injury. Our agents in Fort Myers can go over these minimums with you – and then explain all of the other coverage options as well.

Throughout Fort Myers, especially during storm season, hail damage can take place. The hail has been known to be the size of a golf ball and in addition to leaving a divot on your car, it can chip the clear coat. The clear coat is the coating that goes over the paint. When missing, it can cause the paint to chip away and rust the frame.

Your car insurance does not cover against anything except state minimum requirements unless you choose to add them on.

This means you have to look at collision insurance for various issues that could result from a collision with another vehicle. You also have to look at comprehensive insurance to cover non-driving related incidents, such as hail damage, damage from a parking lot, a stone at your windshield, and more.

Buying car insurance in Fort Myers is easy, especially when you know what your coverage options are. Call an agent and start receiving quotes on a policy today.