What is an AOB?
An Assignment of Benefits (AOB) serves two main purposes when it comes to your insurance claim:
- It gives us, the contractor, permission to speak to your carrier about the scope of work that is needed to be completed on your home. It also gives us permission to gain access to important documents, such as the original insurance estimate and the revised insurance estimate submitted by your carrier without having to ask you to contact them to acquire them for us. The act of going to your carrier for us can become very cumbersome for you, and allowing us that access to your carrier makes the process flow much more smoothly;
- It also adds us to your insurance checks. Checks are made out to you, us as your contractor, and your mortgage company so no one can run away with the check. This protects all parties involved. Just like you need to protect your biggest investment (your home), we also need to protect the work that we complete on your project. Similar to concerns of “fly-by-night” contractors taking off with the money, there are also concerns of dishonest homeowners taking off with insurance proceeds and not paying their contractor for services rendered. The AOB just gives everybody that warm, fuzzy feeling of knowing we are all on the check.
A Common Misconception
A common misconception about AOB’s is that by signing one, the homeowner relinquishes all rights to speak to their carrier about their claim. This is simply untrue. All of our homeowners not only are able to speak to their carrier, they are also able to review all scopes of work we submit to the carrier. As a homeowner, you are involved in every step of the process with absolute transparency.
Why Insurance Carriers Don’t Like AOBs
Insurance companies do not make a profit by paying out top dollar on every claim submitted to them – they make money by collecting premiums and paying out as little as possible on claims. A typical homeowner does not understand all of the unique laws and codes relative to their area for their home to pass city inspection. During times of catastrophic events, such as a hurricane, adjusters are flown in from other states to adjust your claim. They also are not familiar with the local codes and regulations, so they write their estimates based upon their knowledge and the parameters given to them prior to flying into the catastrophic area. As your contractor, it is our job to point out the complete scope of work that needs to be done on your home. Insurance carriers would rather speak to a homeowner because they do not have the construction knowledge to make them pay out.
Needing a roof repair or replacement is stressful enough, so letting your contractor deal with the insurance company relieves some of that for you. Also, contractors handle insurance companies all of the time, so they know what to do when disagreements on scopes arise. While a policyholder may just accept whatever number the insurance company offers them, a contractor knows what work needs to be added to the estimate to pass inspection.