Assignment of Benefits
Q. What is Assignment of Benefits (AOB)?
A. Assignment of Benefits is what happens when a homeowner signs a contract transferring or “assigning” claims proceeds to a contractor in exchange for the contractor repairing the damage to the home. By signing a contract transferring or assigning a contractor to repair the damage of your home, you are transferring the right to any cause of action that may result from a contractor’s incomplete or shoddy work.
Be aware of the dangers of Assignment of Benefits (AOB).
- The very first thing you should do after experiencing a loss is to call your insurance company. The company can document the loss, refer a licensed, reputable contractor, and expedite the claims process.
- Ask any and all contractors—including ones referred by friends and family—if they use AOB and for proof of liability insurance.
- Never sign a contract you haven’t read or don’t understand. Call your insurance company or Jack Rice Insurance if you need help or guidance.
- Be wary of contractors that show up without being called, especially if they offer you something for “free”
- If a contractor contacts you, ask them if they use AOB and request a copy of the work authorization contract.
Q. Do I have coverage if my home floods?
A. No, flood damage is not covered under the homeowner’s policy. Please call us for this important coverage. The National Flood Program provides a policy we would like to discuss with you.
Q. My home is older & I am starting to have to do some things to keep my home in good condition. Are any of those types of items covered?
A. If the problem is an issue of maintenance because of wear, tear, deterioration or improper workmanship, your homeowner’s policy will not cover those costs. Coverage is provided when damage occurs by stated insured events that are sudden and accidental.
Q. If the wind blows down a tree limb and damages my roof or a tornado occurs when there is a Hurricane warning does my Hurricane deductible apply?
A. Yes, if it is determined to be of the same weather system by the National Weather Service, your hurricane deductible will apply. The hurricane deductible becomes applicable when the National Hurricane Center issues a watch or warning in the state of Florida (that means anywhere within the state). The hurricane deductible continues to apply until 72 hours after that watch or warning has been terminated. The amount of the hurricane deductible is not a percentage of the loss. The deductible is a percentage of the insured amount on the dwelling, at the time the loss occurs. That means an insured with a home policy for $100,000 with a 2% hurricane deductible would have to pay the first $2,000 dollars of the loss. If it is a tenant’s or condo policy the percentage applies to the amount insured for the contents. This could be big money in the event of a loss.
Q. My insurance rates keep going up. Is there anything I can do?
A. Yes, there are many premium credits for which you may be eligible, such as those offered for smoke alarms, fire extinguishers, double cylinder deadbolt locks on the exterior doors, and/or local or monitored alarm systems. There are also credits for certain types of storm shutters and for higher deductibles. We suggest discussing these credits with us to determine if any may apply to you.
Q. When I have a covered loss how will my deductible portion be handled?
A. Your total payable claim amount will be reduced by your stated deductible amount. If you have a percentage deductible, the percentage is applied to the policy limit and your total payable claim amount will be reduced by that amount. The deductible on your policy applies each time you have a claim.
Q. Will all my personal property be covered up to the amount shown on my policy?
A. Your actual loss will be covered up to the amount shown on the policy. However, your homeowner’s policy has limits on certain types of personal property and limitations may exist if the personal property is used in certain ways, such as for business. There are special limits on money, jewelry, furs, firearms, electronics, computers and other types of personal property. Contact us for more information on these limitations in the policy.
Q. What do I do if I have a claim?
A. You must try to prevent any further damage to your home. Then, contact us as soon as possible. We will need information about the loss, and will advise you on the steps to take next.
More information is also available from the Insurance Information Institute.