Coalition: All policyholders should agree in writing to assigning over insurance benefits in Florida

By Matthew Smith & James Quiggle
March 27, 2019
Written consent protects policyholder rights under insurance contract in Florida

WASHINGTON, March 26, 2019 — Written consent of all policyholders should be required for an insurance claim to be assigned over to a home-repair contractor or other third party, the Coalition Against Insurance Fraud contends in an amicus brief filed with the Florida Supreme Court.

“It is inescapable that each individual consumer policyholder has every right to require their written consent to be obtained before their very right to control the proceeds is signed away,” the Coalition argues in Restoration 1 v. Ark Royal Insurance Company.

“A contractual insurance policy provision requiring written consent of each insured furthers and ensures the consumer’s interests are protected.”

Two appellate courts in Florida reached conflicting decisions on whether insurance policies may require all policyholders to sign an assignment of benefits to be valid. This leaves state residents with two differing laws. The Florida Supreme Court will have to clear up the confusion.

Ark Royal is one of those rulings. The insurance policy in question explicitly requires that all insureds must agree in writing to a benefits assignment. The court thus should protect the clear rights of all insureds in assigning over claims, the Coalition urges. The lower-court ruling must stand.

Allowing assignments without written consent would cause yet more confusion. “Those circumstances are rife with vulnerability to fraud, and at best uncertainty,” the Coalition contends.

Courts would continually have to interpret whether a policyholder agreed to the benefits assignment. Most of the insurance money already would be paid out by then, further complicating the case.

Florida law also requires insurers deal with insureds in good faith and with the insured’s wishes. This includes protecting policyholder rights to consent to assigning over their insurance benefits. Protecting those rights is sound public policy that must be enforced, the Coalition urges.

A single insured should not take away another insured’s contractual rights under the homeowner policy. Requiring written consent protects every policyholder’s right to assign over insurance benefits. Policy wording requiring every insured’s consent to assigning insurance benefits must be enforced.

“Such provisions only make certain that all insurance consumers as policyholders have the right to decide whether or not to assign their own benefits, rather than have their rights disposed of by someone else,” the Coalition asserts.

Matthew Smith, director of government affairs, 202-393-7332;
James Quiggle, director of communications, 202-393-7331

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