An assignment of interest is a legal contract between you and a third party, such as a roofer, contractor, or other supplier. AOB allows you to transfer specific rights that an insurance policy grants to you to a third party. These rights may include filing a claim, paying the contractor financially and even allowing a third party to file a lawsuit on your behalf!
Although there are reputable organizations that use this form, the AOB is often abused and widely written. In some cases, they may give away all your rights under your third-party insurance policy. Unethical contractors often use AOB to inflate claims costs and damages, leading to legal battles and increased insurance premiums.
How to avoid transferring benefits
Assignment of Interest (AOB) is often used when homeowners have a damaged roof, leaky pipes, etc and they contact a contractor for assistance. The contractor can take this time to present the homeowner with an AOB. Most Assignments of Interest agreements presented to homeowners allow the contractor to take the landlord’s place for insurance payment purposes.
What to pay attention to?
If a contractor gives you a form that says: “I transfer and assign all insurance rights, interests, and causes under my property policy to the contractor.” They’re asking you to sign a waiver of your rights to a claim under your homeowner’s insurance policy and you don’t want that! If you experience a loss, be sure to contact your insurance company before doing anything else. This will help protect you and avoid having to deal with the AOB problem altogether.
Here are some red flags to watch out for:
- Someone knocks on your door to tell you about damage to your home without your knowledge
- Someone said you would get a free kitchen or a free roof for no particular reason
- They claim that the damage is more than obvious
- Permanent repairs begin before your insurance company is allowed to inspect or be notified
- They claim to cover your deductible
Protect yourself
If something sounds too good to be true, it probably is. Don’t be a victim of AOB. Contact your Bankers agent if you have any questions or concerns. Our agents are available to answer any of your questions, don’t hesitate to call us at 800-627-0000.
Keep safe! It’s hurricane season now and we have tips for keeping you and your loved ones safe, as well as a free hurricane survival guide. The National Oceanic and Atmospheric Administration is another great resource for tracking hurricanes and tropical storms.
