An assignment of benefits, or AOB, is a somewhat controversial practice that may sound favorable at first glance. A homeowner who makes use of an AOB signs over their benefits to a contractor, who themselves then seek payment from the insurance company in order for the necessary fixes to be done. What may seem like a convenient way to ease a stressful process frequently becomes a tangled mess of alleged fraud and lengthy litigation. When claims get denied by insurers under AOBs, it’s homeowners who end up on the hook for expensive work, not the contractors.
Other risks associated with signing an AOB include:
- Contractor receives all money (never touches homeowners hands).
- Contractor can/will do the job at a cost least expensive to them (shoddy work, inferior material).
- Contractor collects money but never completes the job.
- Contractor goes out of business and money goes along with them.
- Homeowner has no recourse if contractor doesn't perform.
Instead request a Contingency-based Agreement.
Contingency-based plans, which only grants the contractor the work once the insurer has approved the cost is a safer route that ensures innocent homeowners aren’t left footing the bill. Firms like ABC who have specialized staff reviewing claims to assure homeowners are obtaining everything they are to receive In addition, they’ll have the know-how to complete the necessary repairs to get homes back up to code and ready for inspection.