When your policyholders signs an AOB contract they are signing away the rights to their claim to a contractor! This can have VERY negative repercussions if the contractor charges an amount inconsistent with the amount of work they have performed. When this occurs it is the policyholder who pays the price.

1. Why “assignment
of benefits” is hurting
your agency!

2. Having a bad
loss ratio hurts!

3. Watching your customers
suffer hurts even more!!!

4. When your customers sign a
contract which includes an
“assignment of benefit” both
are more likely to happen!

6. Your customer
“Mary” comes home to a
burst pipe. There is
water all over the floor.
Mary is frantic and calls
a plumber as she tries to
mop up the floor.
The plumber comes and
fixes the pipe and recommends
a company to come over and
clean up the mess.

7. Good so far? Yes!
The pipe is fixed and the water
damage needs to be contained
as quickly as possible.

8. Luckily, Mary’s plumber has
recommended a water
mitigation company
…phew!

10. Mary, the frantic and
stressed-out homeowner, signs. And
the possibility of trouble starts.

11. Within that contract is the term
“Assignment of Benefits”
Words to the effect of 'I transfer and assign
any and all insurance rights, benefits, and
causes of action under my property
insurance policy' to the contractor.’

12. Mary just signed
the rights to her
claim and any monies
owed under the
homeowners policy to
that contractor in exchange
for the contractor fixing the
problem.

13. THE PROBLEM IS….
In many cases the water
mitigation company
charges an amount
inconsistent with the
amount of work
performed, sometimes
far in excess of the
insurance adjuster’s
estimate or the industry
standard.

14. Mary no longer has the right to try to resolve
the issue with her insurance company (even if
she agrees with them).
She has signed that right away!
If the insurance company
challenges the expenses
submitted, Mary is caught
between a rock and a hard
place.

15. Unfortunately, it’s the homeowner who is
caught in the middle and pays the price….
If the insurance
company fights the
inaccurate charges the
contractor could decide
not to finish the work
or even put a lien on
the house
If the insurance company
decides to back down and
just pay the higher price, this
contributes to premiums
rising for all customers

16. NUMBERS SPEAK LOUDER
THAN WORDS..
At American Integrity, 20% of the water
damage claims have come with an
assignment of benefit this year and those
claims, on average, are
34% higher than claims
submitted without this
assignment.

17. AT AMERICAN INTEGRITY
We partner with Nexxus, a network of
preferred contractors that have completed a
comprehensive credentialing process, ensuring
they are licensed, carry the appropriate insurance
and pass criminal background checks.
They NEVER make customers sign away their
rights and we stand behind their work.

18. SO…
WHAT CAN YOU DO!?

19. Remind your customers to call their
insurance company first when they
have a claim:
they can help you
partner with a
reputable contractor
and explain what an
“Assignment of Benefit”
really means.

20. Customers should read any document
they’re asked to sign:
a contractor should
only require a work
authorization so if you
see the phrase
“Assignment of Benefit”
do not sign.

21. Homeowners should beware of
plumber referrals:
Ask if the plumber receives any compensation for
their referral.
Reputable plumbers
refer based on
quality of work, not
referral fees.

22. and beware of
contractors offering gifts
or cash in exchange for
your referral!
Make sure your whole office
understands this problem

23. Tell others (agents, customers,
relatives, anyone you know who
owns a home) about this
problem so they don’t make this
mistake!