With hurricane season upon us, it is important to remember that hurricanes are not only dangerous, but also very expensive. There’s not much we can do to control what havoc mother nature may cause, however, we do have a say in the type of insurance coverage we purchase.
Therefore, it is important to make sure that your business, home and personal belongings are adequately insured in order to prepare for the worst. Remember that storms can also be very expensive so make sure not to under estimate their affects on our lives. As a reminder of just how expensive hurricanes can be, please see the attached article. (Link to article: 10 Most Expensive Hurricanes in the US)
Notwithstanding the fact that we may receive storm warnings, the fact is that preparing financially for storm damage or any sort of property loss is not always financially possible. This is an important issue when considering that most insurance policies place a duty to mitigate damages (prevent further damage) on the policyholder after a loss occurs to your business or home. It can be expected that in any sudden property loss the policyholder will not have the funds necessary to mitigate damages. As a result, many mitigation or restoration companies will accept an Assignment of Benefits (AOB) from the policyholder to pursue payment directly from the insurance company instead of seeking payment from the policyholder.
This can be done even if the policy contains provisions usually referred to as an “anti-assignment” clause and those usually entail a loss payment provision that can also make matters confusing. The person receiving the AOB is entitled to payment once the assignor (usually the policyholder) fulfills the contractual obligations entitling payment under to the insurance policy (a contract). You can see details in a recent decision by the Fifth District Court of Appeals in the case of Phoenix Dryout & Recovery Corp. v. State Farm Insurance Co., 22 Fla. L. Weekly Supp. 1115a (Fla. 5th DCA 2015). (Note: Google Scholar is usually a great place to find these cases promptly and without charge.)