Homeownership is a Herculean responsibility. However, it may seem like a near-impossible task for the first-time homeowner. And well, as a general life rule, if you’re unsure of what you’re about to do, especially when it’s something of extreme importance, you’ll be far better off entrusting your task to a professional who’s had years of experience.
For those who don’t wish to personally handle the intricacies of dealing with an insurance company, there is always the option of opting for an assignment of benefits (AOB).
What exactly is an assignment of benefits?
An assignment of benefits is an agreement that transfers your insurance claims rights to another party. That party is often the business also making the repairs to your home. In signing an assignment of benefits, you relinquish your authority to another party. This party can do the following on your behalf:
- File an insurance claim
- Direct repairs
- Collect insurance payments
Pros
If you think this sounds like you’re giving up too much authority just for convenience, you may be right. However, using an AOB is a sure way of cutting through red tape and extensive processes because the repair business will likely know its way through the procedure. Not only that, but you’re also going to get your repairs done because of the expedited rate at which the procedure will be carried out.
Cons
Convenience and expedience come with a high price if you’re not careful. Unscrupulous contractors and businesses have been known to commit fraud when given an AOB. They may bill in excess and then, later on, sue the insurance company when the insurance company refutes the claim. This hurts homeowners when contractors who cannot collect the fees from the insurance company end up collecting the fees directly from the homeowner.
Countermeasures Against AOB Fraud
This article discusses the signs to look out for in detail. But like any other fraud, AOB fraud can be prevented with vigilance and research. The Internet and numerous forums regarding AOB fraud are great sources of information on the matter.
However, if you genuinely want to get some of the benefits and none of the disadvantages, consider hiring a home insurance agent instead to help you process your claims. It’s as easy as doing a “find a home insurance agent near me” search on Google.
An insurance agent is different from a public adjuster; one should never mistake one for another.
An insurance agent is a professional who helps smooth the claims process. In contrast, a claims adjuster inspects the claimant’s property to determine how much the insurance company should pay for the repairs. In this instance, when you want the process to go smoothly and quickly, the professional you will want to deal with is an insurance agent.
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