The Florida Supreme Court is being asked to weigh in again on an insurance claims case involving an Assignment of Benefits (AOB) contract between a contractor and a homeowner.  It follows a recent ruling by Florida’s Fifth District Court of Appeal against an insurance company that refused to make insurance payments to a third party vendor.

In the case of Speed Dry Inc v. Anchor Property and Casualty Insurance Company, homeowner Wayne Parker had filed a damage claim with Anchor after suffering damage from Hurricane Irma in September of 2017.  He then entered into an AOB agreement with Speed Dry to handle the repair work and any claim negotiations with Anchor.  The AOB also allowed Speed Dry to receive payment directly from Anchor according to the terms of the insurance policy.  After Anchor refused to pay, Speed Dry sued Anchor for breaching the policy.

Anchor asked for and won a summary judgment in Seminole County Circuit Court, citing “alienation restrictions” in the Florida Constitution.  It contended that any insurance proceeds resulting from a loss to homestead property are constitutionally protected to the same extent as the homestead property itself and cannot be assigned by an AOB.  Upon appeal, the 5th DCA overturned the lower court decision, ruling an assignment of post-loss insurance benefits does not transfer title of real property…and is thus treated as an ordinary contract.”

“However, because assignments of post-loss insurance benefits are utilized so extensively, we certify the following question to the Florida Supreme Court as one of great public importance: Does article X, section 4(c) of the Florida Constitution allow the owner of homestead real property, joined by the spouse, if married, to assign post-loss insurance benefits to a third-party contractor contracted to make repairs to the homestead property?” the 5th DCA wrote.

A Florida Supreme Court decision last summer to dismiss an AOB case that it previously had agreed to review has left in limbo conflicting lower court rulings on whether insurance companies have had the right to deny AOBs without the sign-off of all parties with an insured interest.

For more information on AOBs and broader litigation abuse in Florida, contact Jones Family Insurance!

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