Why “assignment

of benefits” is hurting

your agency!

Having a bad

loss ratio hurts!

Watching your customers

suffer hurts even more!!!

When your customers sign a

contract which includes an

“assignment of benefit” both

are more likely to happen!

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.

Good so far? Yes!The pipe is fixed and the water damage needs to be contained

as quickly as possible.

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

Mary, the frantic and stressed-out homeowner, signs. And

the possibility of trouble starts.

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.’

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.

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.

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.

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

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.

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.

SO…WHAT CAN YOU DO!?

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.

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.

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.

and beware of contractors offering gifts or cash in exchange for your referral!

Make sure your whole office understands this problem

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