- Please take caution in speaking with individuals or companies who may come to your home and offer to help with repairs.
- It is important that you never pay for repairs in advance of completed work.
- Before you sign any contract for repair or a contract that includes an Assignment of Benefit (AOB) you should thoroughly read and understand the agreement and the effect it could have on you and the repairs to be done to your home.
Unfortunately, property damages create opportunities for dishonest individuals seeking to profit from losses. An AOB is a contract signed by the homeowner, after a covered loss, which grants a contractor all rights and duties of the associated claim under the insurance policy. This could be for any damage to insured property, such as a roof, siding, gutters, deck, windows or other household features. Once that contract is signed, the contractor now owns all rights and duties to the claim. This could have the following ramifications:
- If there is a disagreement between the contractor and the insurer, the contractor may file a suit against the insurer in the policyholder's name. The policyholder has no rights in the suit, and the suit could have an impact on future rates and insurability.
- The policyholder could be financially responsible to the contractor for the difference in the contractor's price and the insurer's payment.
- The policyholder could lose any ability to seek further action against the insurer because his/her rights have been assigned to the contractor.
- If a policyholder signs the agreement and then wishes to fire the contractor, that contractor still has claim to the insurance payment.
- AOB is a binding legal contract and there is no right to rescind or cancel until the work has been completed by the contractor.
Armed Forces Insurance members do not need to sign an AOB to initiate repairs. You should be very cautious of vendors who pressure you or refuse work unless you sign a contract. Here are some helpful tips when looking for a contractor:
Beware of anyone who knocks on your door, after a storm, offering services. Avoid any vendor that wants you to relinquish insurance benefits. Get a written contract detailing the work that will be completed, the materials to be used, and the price for labor and materials. Get multiple repair bids for major damage.
As always, if you have questions, please contact us at 800-255-6792.