what is the meaning of assignment of insurance

What is an assignment of benefits?

Three people in an office talking over a pile of papers.

The last time you sought medical care, you likely made an appointment with your provider, got the treatment you needed, paid your copay or deductible, and that was it. No paperwork, no waiting to be reimbursed; your doctor received payment from your insurance company and you both went on with your lives.

This is how most people receive health care in the U.S. This system, known as assignment of benefits or AOB, is now being used with other types of insurance, including auto and homeowners coverage .

What is an assignment of benefits?

An AOB is a legal agreement that allows your insurance company to directly pay a third party for services performed on your behalf. In the case of health care, it could be your doctor or another medical professional providing care. With a homeowners, renters, or auto insurance claim, the third party could be a contractor, auto repair shop, or other facility.

Assignment of benefits is legal, thanks to a concept known as freedom of contract, which says two parties may make a private agreement, including the forfeiture of certain rights, and the government may not interfere. There are exceptions, making freedom of contract something less than an absolute right. For example, the contract may not violate the law or contain unfair terms.

Not all doctors or contractors utilize AOBs. Therefore, it’s a good idea to make sure the doctor or service provider and you are on the same page when it comes to AOBs before treatment or work begins.

How an AOB works

The function of an AOB agreement varies depending on the type of insurance policy involved, the healthcare provider, contractor, or service provider, and increasingly, state law. Although an AOB is normal in health insurance, other applications of assignment of benefits have now included the auto and homeowners insurance industry.

Because AOBs are common in health care, you probably don’t think twice about signing a piece of paper that says “assignment of benefits” across the top. But once you sign it, you’re likely turning over your right to deal with your insurance company regarding service from that provider. Why would you do this?

According to Dr. David Berg of Redirect Health , the reason is simple: “Without an AOB in place, the patient themselves would be responsible for paying the cost of their service and would then file a claim with their insurance company for reimbursement.”

With homeowners or auto insurance, the same rules apply. Once you sign the AOB, you are effectively out of the picture. The contractor who reroofs your house or the mechanic who rebuilds your engine works with your insurance company by filing a claim on your behalf and receiving their money without your help or involvement.

“Each state has its own rules, regulations, and permissions regarding AOBs,” says Gregg Barrett, founder and CEO of WaterStreet , a cloud-based P&C insurance administration platform. “Some states require a strict written breakdown of work to be done, while others allow assignment of only parts of claims.”

Within the guidelines of the specific insurance rules for AOBs in your state, the general steps include:

You and your contractor draw up an AOB clause as part of the contract.
The contract stipulates the exact work that will be completed and all necessary details.
The contractor sends the completed AOB to the insurance company where an adjuster reviews, asks questions, and resolves any discrepancies.
The contractor’s name (or that of an agreed-upon party) is listed to go on the settlement check.

After work is complete and signed off, the insurer will issue the check and the claim will be considered settled.

Example of an assignment of benefits

If you’re dealing with insurance, how would an AOB factor in? Let’s take an example. “Say you have a water leak in the house,” says Angel Conlin, chief insurance officer at Kin Insurance . “You call a home restoration company to stop the water flow, clean up the mess, and restore your home to its former glory. The restoration company may ask for an assignment of benefits so it can deal directly with the insurance company without your input.”

In this case, by eliminating the homeowner, whose interests are already represented by an experienced insurance adjustor, the AOB reduces redundancy, saves time and money, and allows the restoration process to proceed with much greater efficiency.

When would you need to use an assignment of benefits?

An AOB can simplify complicated and costly insurance transactions and allow you to turn these transactions over to trusted experts, thereby avoiding time-consuming negotiations.

An AOB also frees you from paying the entire bill upfront and seeking reimbursement from your insurance company after work has been completed or services rendered. Since you are not required to sign an assignment of benefits, failure to sign will result in you paying the entire medical bill and filing for reimbursement. The three most common uses of AOBs are with health insurance, car insurance, and homeowners insurance.

Assignment of benefits for health insurance

As discussed, AOBs in health insurance are commonplace. If you have health insurance, you’ve probably signed AOBs for years. Each provider (doctor) or practice requires a separate AOB. From your point of view, the big advantages of an AOB are that you receive medical care, your doctor and insurance company work out the details and, in the event of a disagreement, those two entities deal with each other.

Assignment of benefits for car owners

If your car is damaged in an accident and needs extensive repair, the benefits of an AOB can quickly add up. Not only will you have your automobile repaired with minimal upfront costs to you, inconvenience will be almost nonexistent. You drop your car off (or have it towed), wait to be called, told the repair is finished, and pick it up. Similar to a health care AOB, disagreements are worked out between the provider and insurer. You are usually not involved.

Assignment of benefits for homeowners

When your home or belongings are damaged or destroyed, your primary concern is to “return to normal.” You want to do this with the least amount of hassle. An AOB allows you to transfer your rights to a third party, usually a contractor, freeing you to deal with the crisis at hand.

When you sign an AOB, your contractor can begin immediately working on damage repair, shoring up against additional deterioration, and coordinating with various subcontractors without waiting for clearance or communication with you.

The fraud factor

No legal agreement, including an AOB, is free from the possibility of abuse or fraud. Built-in safeguards are essential to ensure the benefits you assign to a third party are as protected as possible.

In terms of what can and does go wrong, the answer is: plenty. According to the National Association of Mutual Insurance Companies (NAMICs), examples of AOB fraud include inflated invoices or charges for work that hasn’t been done. Another common tactic is to sue the insurance company, without the policyholder’s knowledge or consent, something that can ultimately result in the policyholder being stuck with the bill and higher insurance premiums due to losses experienced by the insurer.

State legislatures have tried to protect consumers from AOB fraud and some progress has been made. Florida, for example, passed legislation in 2019 that gives consumers the right to rescind a fraudulent contract and requires that AOB contracts include an itemized description of the work to be done. Other states, including North Dakota, Kansas, and Iowa have all signed NAMIC-backed legislation into law to protect consumers from AOB fraud.

The National Association of Insurance Commissioners (NAIC), offers advice for consumers to help avoid AOB fraud and abuse:

File a claim with your insurer before you hire a contractor. This ensures you know what repairs need to be made.
Don’t pay in full upfront. Legitimate contractors do not require it.
Get three estimates before selecting a contractor.
Get a full written contract and read it carefully before signing.
Don’t be pressured into signing an AOB. You are not required to sign an AOB.

Pros and cons of an assignment of benefits

The advantages and disadvantages of an AOB agreement depend largely on the amount and type of protection your state’s insurance laws provide.

Pros of assignment of benefits

With proper safeguards in place to reduce opportunities for fraud, AOBs have the ability to streamline and simplify the insurance claims process.

An AOB frees you from paying for services and waiting for reimbursement from your insurer.
Some people appreciate not needing to negotiate with their insurer.
You are not required to sign an AOB.

Cons of assignment of benefits

As with most contracts, AOBs are a double-edged sword. Be aware of potential traps and ask questions if you are unsure.

Signing an AOB could make you the victim of a scam without knowing it until your insurer refuses to pay.
An AOB doesn’t free you from the ultimate responsibility to pay for services rendered, which could drag you into expensive litigation if things go south.
Any AOB you do sign is legally binding.

The takeaway

An AOB, as the health insurance example shows, can simplify complicated and costly insurance transactions and help consumers avoid time-consuming negotiations. And it can save upfront costs while letting experts work out the details.

It can also introduce a nightmare scenario laced with fraud requiring years of costly litigation. Universal state-level legislation with safeguards is required to avoid the latter. Until that is in place, your best bet is to work closely with your insurer when signing an AOB. Look for suspicious or inflated charges when negotiating with contractors, providers, and other servicers.

EDITORIAL DISCLOSURE : The advice, opinions, or rankings contained in this article are solely those of the Fortune Recommends ™ editorial team. This content has not been reviewed or endorsed by any of our affiliate partners or other third parties.

Assignment of Benefits: What It Is, and How It Can Affect your Property Insurance Claim

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What is an Assignment of Benefits?

In the context of insured property claims, an assignment of benefits (AOB) is an agreement between you and a contractor in which you give the contractor your right to insurance payments for a specific scope of work . In exchange, the contractor agrees that it will not seek payment from you for that scope of work, except for the amount of any applicable deductible. In other words, you give part of your insurance claim to your contractor, and your contractor agrees not to collect from you for part of its work.

The most important thing to know about an assignment of benefits is that it puts your contractor in control your claim , at least for their scope of work. Losing that control can significantly affect the direction and outcome of your claim, so you should fully understand the implications of an AOB (sometimes called an assignment of claims or AOC) before signing one.

How Does an Assignment of Benefits Work in Practice?

Let’s say you’re an insured homeowner, and Hurricane Ian significantly damaged your roof. Let’s also assume your homeowner’s policy covers that damage. A roofer, after inspecting your roof and reviewing your insurance policy, might conclude that your insurer is probably going to pay for a roof replacement under your insurance policy. The only problem is that it’s early in the recovery process, and your insurer hasn’t yet stated whether it will pay for the roof replacement proposed by your contractor. So if you want your roof replaced now, you would ordinarily agree to pay your roofer for the replacement, and wait in hopes that your insurer reimburses you for the work. This means that if your insurance company refuses to pay or drags out payment, you’re on the hook to your roofer for the cost of the replacement.

As an alternative to agreeing to pay your roofer for the full cost of the work, you could sign an assignment of benefits for the roof replacement. In this scenario, your roofer owns the part of your insurance claim that pertains to the roof replacement. You might have to pay your roofer for the amount of your deductible, but you probably don’t have to pay them for the rest of the cost of the work. And if your insurance company refuses to pay or drags out payment for the roof replacement, it’s your roofer, and not you, who would be on the hook for that shortfall.

So should you sign an AOB? Not necessarily. Read below to understand the pros and cons of an assignment of benefits.

Are There any Downsides to Signing an Assignment of Benefits?

Yes.

You lose control of your claim . This is the most important factor to understand when considering whether to sign an AOB. An AOB is a formal assignment of your legal rights to payment under your insurance contract. Unless you’re able to cancel the AOB, your contractor will have full control over your claim as it relates to their work.

To explain why that control could matter, let’s go back to the roof replacement example. When you signed the AOB, the scope of work you agreed on was to replace the roof. But you’re not a roofing expert, so you don’t know whether the costs charged or the materials used by the roofer in its statement of work are industry appropriate or not. In most cases, they probably are appropriate, and there’s no problem. But if they’re not – if, for instance, the roofer’s prices are unreasonably high – then the insurer may not approve coverage for the replacement. At that point, the roofer could lower its prices so the insurer approves the work, but it doesn’t have to, because it controls the claim . Instead it could hold up work and threaten to sue your insurer unless it approves the work at the originally proposed price. Now the entire project is insnared in litigation, leaving you in a tough spot with your insurer for your other claims and, most importantly, with an old leaky roof.

Misunderstanding the Scope of Work. Another issue that can arise is that you don’t understand the scope of the assignment of benefits. Contractor estimates and scopes of work are often highly technical documents that can be long on detail but short on clarity. Contractors are experts at reading and writing them. You are not. That difference matters because the extent of your assignment of benefits is based on that technical, difficult-to-understand scope of work. This can lead to situations where your understanding of what you’re authorizing the contractor to do is very different from what you’ve actually authorized in the AOB agreement.

In many cases, it’s not necessary . Many contractors will work with you and your insurer to provide a detailed estimate of their work, and will not begin that work until your insurer has approved coverage for it. This arrangement significantly reduces the risk of you being on the hook for uninsured repairs, without creating any of the potential problems that can occur when you give away your rights to your claim.

Do I have to sign an Assignment of Benefits?

No. You are absolutely not required to sign an AOB if you do not want to.

Are There any Benefits to Signing an Assignment of Benefits?

Potentially, but only if you’ve fully vetted your contractor and your claim involves complicated and technical construction issues that you don’t want to deal with.

First, you must do your homework to fully vet your contractor! Do not just take their word for it or be duped by slick ads. Read reviews, understand their certificate of insurance, know where they’re located, and, if possible, ask for and talk to references. If you’ve determined that the contractor is highly competent at the work they do, is fully insured, and has a good reputation with customers, then that reduces the risk that they’ll abuse their rights to your claim.

Second, if your claim involves complicated reconstruction issues, a reputable contractor may be well equipped to handle the claim and move it forward. If you don’t want to deal with the hassle of handling a complicated claim like this, and you know you have a good contractor, one way to get rid of that hassle is an AOB.

Another way to get rid of the hassle is to try Claimly, the all-in-one claims handling tool that get you results but keeps you in control of your claim.

Can my insurance policy restrict the use of AOBs?

Yes, it’s possible that your Florida insurance policy restricts the use of AOBs, but only if all of the following criteria are met:

When you selected your coverage, your insurer offered you a different policy with the same coverage, only it did not restrict the right to sign an AOB.
Your insurer made the restricted policy available at a lower cost than the unrestricted policy.
If the policy completely prohibits AOBs, then it was made available at a lower cost than any policy partially prohibiting AOBs.
The policy includes on its face the following notice in 18-point uppercase and boldfaced type:

THIS POLICY DOES NOT ALLOW THE UNRESTRICTED ASSIGNMENT OF POST-LOSS INSURANCE BENEFITS. BY SELECTING THIS POLICY, YOU WAIVE YOUR RIGHT TO FREELY ASSIGN OR TRANSFER THE POST-LOSS PROPERTY INSURANCE BENEFITS AVAILABLE UNDER THIS POLICY TO A THIRD PARTY OR TO OTHERWISE FREELY ENTER INTO AN ASSIGNMENT AGREEMENT AS THE TERM IS DEFINED IN SECTION 627.7153 OF THE FLORIDA STATUTES.

627.7153.

Pro Tip : If you have an electronic copy of your complete insurance policy (not just the declaration page), then search for “policy does not allow the unrestricted assignment” or another phrase from the required language above to see if your policy restricts an AOB. If your policy doesn’t contain this required language, it probably doesn’t restrict AOBs.

Do I have any rights or protections concerning Assignments of Benefits?

Yes, you do. Florida recently enacted laws that protect consumers when dealing with an AOB.

Protections in the AOB Contract

To be enforceable, a Assignments of Benefits must meet all of the following requirements:

Be in writing and executed by and between you and the contractor.
Contain a provision that allows you to cancel the assignment agreement without a penalty or fee by submitting a written notice of cancellation signed by the you to the assignee:
at least 30 days after the date work on the property is scheduled to commence if the assignee has not substantially performed, or
at least 30 days after the execution of the agreement if the agreement does not contain a commencement date and the assignee has not begun substantial work on the property.
Contain a provision requiring the assignee to provide a copy of the executed assignment agreement to the insurer within 3 business days after the date on which the assignment agreement is executed or the date on which work begins, whichever is earlier.
Contain a written, itemized, per-unit cost estimate of the services to be performed by the assignee .
Relate only to work to be performed by the assignee for services to protect, repair, restore, or replace a dwelling or structure or to mitigate against further damage to such property.
Contain the following notice in 18-point uppercase and boldfaced type:

YOU ARE AGREEING TO GIVE UP CERTAIN RIGHTS YOU HAVE UNDER YOUR INSURANCE POLICY TO A THIRD PARTY, WHICH MAY RESULT IN LITIGATION AGAINST YOUR INSURER. PLEASE READ AND UNDERSTAND THIS DOCUMENT BEFORE SIGNING IT. YOU HAVE THE RIGHT TO CANCEL THIS AGREEMENT WITHOUT PENALTY WITHIN 14 DAYS AFTER THE DATE THIS AGREEMENT IS EXECUTED, AT LEAST 30 DAYS AFTER THE DATE WORK ON THE PROPERTY IS SCHEDULED TO COMMENCE IF THE ASSIGNEE HAS NOT SUBSTANTIALLY PERFORMED, OR AT LEAST 30 DAYS AFTER THE EXECUTION OF THE AGREEMENT IF THE AGREEMENT DOES NOT CONTAIN A COMMENCEMENT DATE AND THE ASSIGNEE HAS NOT BEGUN SUBSTANTIAL WORK ON THE PROPERTY. HOWEVER, YOU ARE OBLIGATED FOR PAYMENT OF ANY CONTRACTED WORK PERFORMED BEFORE THE AGREEMENT IS RESCINDED. THIS AGREEMENT DOES NOT CHANGE YOUR OBLIGATION TO PERFORM THE DUTIES REQUIRED UNDER YOUR PROPERTY INSURANCE POLICY.

Contain a provision requiring the assignee to indemnify and hold harmless the assignor from all liabilities, damages, losses, and costs, including, but not limited to, attorney fees.

Contractor Duties

Under Florida law, a contractor (or anyone else) receiving rights to a claim under an AOB:

Must provide you with accurate and up-to-date revised estimates of the scope of work to be performed as supplemental or additional repairs are required.
Must perform the work in accordance with accepted industry standards.
May not seek payment from you exceeding the applicable deductible under the policy unless asked the contractor to perform additional work at the your own expense.
Must, as a condition precedent to filing suit under the policy, and, if required by the insurer, submit to examinations under oath and recorded statements conducted by the insurer or the insurer’s representative that are reasonably necessary, based on the scope of the work and the complexity of the claim, which examinations and recorded statements must be limited to matters related to the services provided, the cost of the services, and the assignment agreement.
Must, as a condition precedent to filing suit under the policy, and, if required by the insurer, participate in appraisal or other alternative dispute resolution methods in accordance with the terms of the policy.
If the contractor is making emergency repairs, the assignment of benefits cannot exceed the greater of $3,000 or 1% of your Coverage A limit.

Practice Areas

Assignment of benefits: what you need to know.

August 17, 2022
Steven Schwartzapfel

Insurance can be useful, but dealing with the back-and-forth between insurance companies and contractors, medical specialists, and others can be a time-consuming and ultimately unpleasant experience. You want your medical bills to be paid without having to act as a middleman between your healthcare provider and your insurer.

However, there’s a way you can streamline this process. With an assignment of benefits, you can designate your healthcare provider or any other insurance payout recipient as the go-to party for insurance claims. While this can be convenient, there are certain risks to keep in mind as well.

Below, we’ll explore what an assignment of insurance benefits is (as well as other forms of remediation), how it works, and when you should employ it. For more information, or to learn whether you may have a claim against an insurer, contact Schwartzapfel Lawyers now at 1-516-342-2200 .

What Is an Assignment of Benefits?

An assignment of benefits (AOB) is a legal process through which an insured individual or party signs paperwork that designates another party like a contractor, company, or healthcare provider as their insurance claimant .

Suppose you’re injured in a car accident and need to file a claim with your health insurance company for medical bills and related costs. However, you also need plenty of time to recover. The thought of constantly negotiating between your insurance company, your healthcare provider, and anyone else seems draining and unwelcome.

With an assignment of benefits, you can designate your healthcare provider as your insurance claimant. Then, your healthcare provider can request insurance payouts from your healthcare insurance provider directly.

Through this system, the health insurance provider directly pays your physician or hospital rather than paying you. This means you don’t have to pay your healthcare provider. It’s a streamlined, straightforward way to make sure insurance money gets where it needs to go. It also saves you time and prevents you from having to think about insurance payments unless absolutely necessary.

What Does an Assignment of Benefits Mean?

An AOB means that you designate another party as your insurance claimant. In the above example, that’s your healthcare provider, which could be a physician, hospital, or other organization.

With the assignment of insurance coverage, that healthcare provider can then make a claim for insurance payments directly to your insurance company. The insurance company then pays your healthcare provider directly, and you’re removed as the middleman.

As a bonus, this system sometimes cuts down on your overall costs by eliminating certain service fees. Since there’s only one transaction — the transaction between your healthcare provider and your health insurer — there’s only one set of service fees to contend with. You don’t have to deal with two sets of service fees from first receiving money from your insurance provider, then sending that money to your healthcare provider.

Ultimately, the point of an assignment of benefits is to make things easier for you, your insurer, and anyone else involved in the process.

What Types of Insurance Qualify for an Assignment of Benefits?

Most types of commonly held insurance can work with an assignment of benefits. These insurance types include car insurance, healthcare insurance, homeowners insurance, property insurance, and more.

Note that not all insurance companies allow you to use an assignment of benefits. For an assignment of benefits to work, the potential insurance claimant and the insurance company in question must each sign the paperwork and agree to the arrangement. This prevents fraud (to some extent) and ensures that every party goes into the arrangement with clear expectations.

If your insurance company does not accept assignments of benefits, you’ll have to take care of insurance payments the traditional way. There are many reasons why an insurance company may not accept an assignment of benefits.

To speak with a Schwartzapfel Lawyers expert about this directly, call 1-516-342-2200 for a free consultation today. It will be our privilege to assist you with all your legal questions, needs, and recovery efforts.

Who Uses Assignments of Benefits?

Many providers, services, and contractors use assignments of benefits. It’s often in their interests to accept an assignment of benefits since they can get paid for their work more quickly and make critical decisions without having to consult the insurance policyholder first.

Imagine a circumstance in which a homeowner wants a contractor to add a new room to their property. The contractor knows that the scale of the project could increase or shrink depending on the specifics of the job, the weather, and other factors.

If the homeowner uses an assignment of benefits to give the contractor rights to make insurance claims for the project, that contractor can then:

Bill the insurer directly for their work. This is beneficial since it ensures that the contractor’s employees get paid promptly and they can purchase the supplies they need.
Make important decisions to ensure that the project completes on time. For example, a contract can authorize another insurance claim for extra supplies without consulting with the homeowner beforehand, saving time and potentially money in the process.

Practically any company or organization that receives payments from insurance companies may choose to take advantage of an assignment of benefits with you. Example companies and providers include:

Ambulance services
Drug and biological companies
Lab diagnostic services
Hospitals and medical centers like clinics
Certified medical professionals such as nurse anesthetists, nurse midwives, clinical psychologists, and others
Ambulatory surgical center services
Permanent repair and improvement contractors like carpenters, plumbers, roofers, restoration companies, and others
Auto repair shops and mechanic organizations

Advantages of Using an Assignment of Benefits

An assignment of benefits can be an advantageous contract to employ, especially if you believe that you’ll need to pay a contractor, healthcare provider, and/or other organization via insurance payouts regularly for the near future.

These benefits include but are not limited to:

Save time for yourself. Again, imagine a circumstance in which you are hospitalized and have to pay your healthcare provider through your health insurance payouts. If you use an assignment of benefits, you don’t have to make the payments personally or oversee the insurance payouts. Instead, you can focus on resting and recovering.
Possibly save yourself money in the long run. As noted above, an assignment of benefits can help you circumvent some service fees by limiting the number of transactions or money transfers required to ensure everyone is paid on time.
Increased peace of mind. Many people don’t like having to constantly think about insurance payouts, contacting their insurance company, or negotiating between insurers and contractors/providers. With an assignment of benefits, you can let your insurance company and a contractor or provider work things out between them, though this can lead to applications later down the road.

Because of these benefits, many recovering individuals, car accident victims, homeowners, and others utilize AOB agreements from time to time.

Risks of Using an Assignment of Benefits

Worth mentioning, too, is that an assignment of benefits does carry certain risks you should be aware of before presenting this contract to your insurance company or a contractor or provider. Remember, an assignment of benefits is a legally binding contract unless it is otherwise dissolved (which is technically possible).

The risks of using an assignment of benefits include:

You give billing control to your healthcare provider, contractor, or another party. This allows them to bill your insurance company for charges that you might not find necessary. For example, a home improvement contractor might bill a homeowner’s insurance company for an unnecessary material or improvement. The homeowner only finds out after the fact and after all the money has been paid, resulting in a higher premium for their insurance policy or more fees than they expected.
You allow a contractor or service provider to sue your insurance company if the insurer does not want to pay for a certain service or bill. This can happen if the insurance company and contractor or service provider disagree on one or another billable item. Then, you may be dragged into litigation or arbitration you did not agree to in the first place.
You may lose track of what your insurance company pays for various services . As such, you could be surprised if your health insurance or other insurance premiums and deductibles increase suddenly.

Given these disadvantages, it’s still wise to keep track of insurance payments even if you choose to use an assignment of benefits. For example, you might request that your insurance company keep you up to date on all billable items a contractor or service provider charges for the duration of your treatment or project.

For more on this and related topic, call Schwartzapfel Lawyers now at 1-516-342-2200 .

How To Make Sure an Assignment of Benefits Is Safe

Even though AOBs do carry potential disadvantages, there are ways to make sure that your chosen contract is safe and legally airtight. First, it’s generally a wise idea to contact knowledgeable legal representatives so they can look over your paperwork and ensure that any given assignment of benefits doesn’t contain any loopholes that could be exploited by a service provider or contractor.

The right lawyer can also make sure that an assignment of benefits is legally binding for your insurance provider. To make sure an assignment of benefits is safe, you should perform the following steps:

Always check for reviews and references before hiring a contractor or service provider, especially if you plan to use an AOB ahead of time. For example, you should stay away if a contractor has a reputation for abusing insurance claims.
Always get several estimates for work, repairs, or bills. Then, you can compare the estimated bills and see whether one contractor or service provider is likely to be honest about their charges.
Get all estimates, payment schedules, and project schedules in writing so you can refer back to them later on.
Don’t let a service provider or contractor pressure you into hiring them for any reason . If they seem overly excited about getting started, they could be trying to rush things along or get you to sign an AOB so that they can start issuing charges to your insurance company.
Read your assignment of benefits contract fully. Make sure that there aren’t any legal loopholes that a contractor or service provider can take advantage of. An experienced lawyer can help you draft and sign a beneficial AOB contract.

Can You Sue a Party for Abusing an Assignment of Benefits?

Sometimes. If you believe your assignment of benefits is being abused by a contractor or service provider, you may be able to sue them for breaching your contract or even AOB fraud. However, successfully suing for insurance fraud of any kind is often difficult.

Also, you should remember that a contractor or service provider can sue your insurance company if the insurance carrier decides not to pay them. For example, if your insurer decides that a service provider is engaging in billing scams and no longer wishes to make payouts, this could put you in legal hot water.

If you’re not sure whether you have grounds for a lawsuit, contact Schwartzapfel Lawyers today at 1-516-342-2200 . At no charge, we’ll examine the details of your case and provide you with a consultation. Don’t wait. Call now!

Assignment of Benefits FAQs

Which states allow assignments of benefits.

Every state allows you to offer an assignment of benefits to a contractor and/or insurance company. That means, whether you live in New York, Florida, Arizona, California, or some other state, you can rest assured that AOBs are viable tools to streamline the insurance payout process.

Can You Revoke an Assignment of Benefits?

Yes. There may come a time when you need to revoke an assignment of benefits. This may be because you no longer want the provider or contractor to have control over your insurance claims, or because you want to switch providers/contractors.

To revoke an assignment of benefits agreement, you must notify the assignee (i.e., the new insurance claimant). A legally solid assignment of benefits contract should also include terms and rules for this decision. Once more, it’s usually a wise idea to have an experienced lawyer look over an assignment of benefits contract to make sure you don’t miss these by accident.

Contact Schwartzapfel Lawyers Today

An assignment of benefits is an invaluable tool when you need to streamline the insurance claims process. For example, you can designate your healthcare provider as your primary claimant with an assignment of benefits, allowing them to charge your insurance company directly for healthcare costs.

However, there are also risks associated with an assignment of benefits. If you believe a contractor or healthcare provider is charging your insurance company unfairly, you may need legal representatives. Schwartzapfel Lawyers can help.

As knowledgeable New York attorneys who are well-versed in New York insurance law, we’re ready to assist with any and all litigation needs. For a free case evaluation and consultation, contact Schwartzapfel Lawyers today at 1-516-342-2200 !

Schwartzapfel Lawyers, P.C. | Fighting For You™™

What Is an Insurance Claim? | Experian

What is assignment of benefits, and how does it impact insurers? | Insurance Business Mag

Florida Insurance Ruling Sets Precedent for Assignment of Benefits | Law.com

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Assignment of benefits

Assignment of benefits is an agreement that gives your claims benefits to someone else.

What is an assignment of benefits?

An assignment of benefits (or AOB for short) is an agreement that gives your claims benefits, and in some instances complete control of your claim, to someone else. It’s usually used so that a contractor can "stand in your shoes" and file a claim, make decisions about repairs, and collect insurance payments from your insurance company directly for covered repairs. In some states, the contractor will even file a lawsuit against your insurer as your assignee.

Why do homeowners agree to an assignment of benefits?

Homeowners may sign an assignment of benefits form because they think it’s more convenient and efficient than dealing with the claims process firsthand.

Once a contractor has been assigned your benefits, they tell the insurance company what work they believe is required and negotiate the claim. For example, say you have a water leak in the house. You call a home restoration company to stop the water flow, clean up the mess, and restore your home to its former glory. The restoration company may ask for an assignment of benefits so it can deal directly with the insurance company without your input. That may sound like a relief at first glance – someone else can deal with all that!

But signing away your rights in the claims process may not be worth the risk.

Assignment of benefits in Florida: a case of rampant fraud

Because the assignment of benefits takes control out of the homeowner’s hands, insurance fraud is a major concern. Some contractors may take advantage of the situation and inflate repair needs and costs or bill for work that was never completed. They may also hire attorneys to sue the insurance company if it does not pay the full amount of their estimate or denies claims.

These lawsuits became a huge problem in Florida – by 2018, there were 135,000 AOB lawsuits , a 70 percent increase in 15 years. On the whole, the FBI estimates fraudulent claims account for nearly $6 billion of the $80 billion appropriated for post-hurricane reconstruction.

Florida eventually passed a bill in 2019 to curb the abuse of the assignment of benefits.

Ultimately, AOB fraud hurts homeowners the most. It increases homeowners insurance rates across the board, and you may be stuck with incomplete work and no recourse.

What responsibilities does the AOB contractor have?

Once you sign an AOB, a contractor has full power to make all decisions about the claim without consulting you. The assignment of benefits gives contractors the ability to:

File the insurance claim .
Work directly with insurance claims adjusters.
Make repair decisions.
Complete repairs.
Directly bill the insurance carrier for all work completed.
Sue your insurance company regarding your claim.

Sometimes the assignment of benefits limits the scope of the work the contractor was hired for. For example, say your home has a leaky pipe. You may hire a plumber to fix the leak, a remediation company to dry the walls and carpet, and a general contractor to replace the bathroom cabinets. Each of the three contractors may have a respective assignment of benefits for their part of the job.

How assignment of benefits impact homeowners

Under some circumstances, an assignment of benefits agreement could work out for homeowners who don’t want to handle their insurance claim. If the contractor is reputable, performs the work, and knows what information the insurance company needs, it can be a big help.

For example:

The claims adjuster will work directly with the contractor.
The contractor would handle remediation and repairs.
The contractor would bill the insurance company, not the homeowner.

AOB arrangements only work for covered damage in need of repair. If you must replace belongings or appliances, you’d still need to work directly with your insurer and payments would go to you.

Protecting yourself in an assignment of benefits agreement

Don’t sign an assignment of benefits agreement right off the bat. Before you hire any contractor:

Get multiple quotes.
Check references, licenses, and their insurance.
Get written estimates for potential work.
Get a guarantee to back the workmanship.
Make sure you get to approve the completed work.
Request copies of all paperwork sent to your insurance company.
Require that the contractor show you the documents you are actually signing.

You might be tempted to hire the first contractor you find, but you save yourself headaches if you do some due diligence before signing an assignment of benefits. Great contractors use this to expedite repairs and spare you some work. Take a beat to find that great contractor .

What is Medicare assignment and how does it work?

Kimberly Lankford,

Because Medicare decides how much to pay providers for covered services, if the provider agrees to the Medicare-approved amount, even if it is less than they usually charge, they’re accepting assignment.

A doctor who accepts assignment agrees to charge you no more than the amount Medicare has approved for that service. By comparison, a doctor who participates in Medicare but doesn’t accept assignment can potentially charge you up to 15 percent more than the Medicare-approved amount.

That’s why it’s important to ask if a provider accepts assignment before you receive care, even if they accept Medicare patients. If a doctor doesn’t accept assignment, you will pay more for that physician’s services compared with one who does.

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How much do I pay if my doctor accepts assignment?

If your doctor accepts assignment, you will usually pay 20 percent of the Medicare-approved amount for the service, called coinsurance, after you’ve paid the annual deductible. Because Medicare Part B covers doctor and outpatient services, your $240 deductible for Part B in 2024 applies before most coverage begins.

All providers who accept assignment must submit claims directly to Medicare, which pays 80 percent of the approved cost for the service and will bill you the remaining 20 percent. You can get some preventive services and screenings, such as mammograms and colonoscopies , without paying a deductible or coinsurance if the provider accepts assignment.

What if my doctor doesn’t accept assignment?

A doctor who takes Medicare but doesn’t accept assignment can still treat Medicare patients but won’t always accept the Medicare-approved amount as payment in full.

This means they can charge you up to a maximum of 15 percent more than Medicare pays for the service you receive, called “balance billing.” In this case, you’re responsible for the additional charge, plus the regular 20 percent coinsurance, as your share of the cost.

How to cover the extra cost? If you have a Medicare supplement policy , better known as Medigap, it may cover the extra 15 percent, called Medicare Part B excess charges.

All Medigap policies cover Part B’s 20 percent coinsurance in full or in part. The F and G policies cover the 15 percent excess charges from doctors who don’t accept assignment, but Plan F is no longer available to new enrollees, only those eligible for Medicare before Jan. 1, 2020, even if they haven’t enrolled in Medicare yet. However, anyone who is enrolled in original Medicare can apply for Plan G.

Remember that Medigap policies only cover excess charges for doctors who accept Medicare but don’t accept assignment, and they won’t cover costs for doctors who opt out of Medicare entirely.

Good to know. A few states limit the amount of excess fees a doctor can charge Medicare patients. For example, Massachusetts and Ohio prohibit balance billing, requiring doctors who accept Medicare to take the Medicare-approved amount. New York limits excess charges to 5 percent over the Medicare-approved amount for most services, rather than 15 percent.

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How do I find doctors who accept assignment?

Before you start working with a new doctor, ask whether he or she accepts assignment. About 98 percent of providers billing Medicare are participating providers, which means they accept assignment on all Medicare claims, according to KFF.

You can get help finding doctors and other providers in your area who accept assignment by zip code using Medicare’s Physician Compare tool .

Those who accept assignment have this note under the name: “Charges the Medicare-approved amount (so you pay less out of pocket).” However, not all doctors who accept assignment are accepting new Medicare patients.

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What does it mean if a doctor opts out of Medicare?

Doctors who opt out of Medicare can’t bill Medicare for services you receive. They also aren’t bound by Medicare’s limitations on charges.

In this case, you enter into a private contract with the provider and agree to pay the full bill. Be aware that neither Medicare nor your Medigap plan will reimburse you for these charges.

In 2023, only 1 percent of physicians who aren’t pediatricians opted out of the Medicare program, according to KFF. The percentage is larger for some specialties — 7.7 percent of psychiatrists and 4.2 percent of plastic and reconstructive surgeons have opted out of Medicare.

Keep in mind

These rules apply to original Medicare. Other factors determine costs if you choose to get coverage through a private Medicare Advantage plan . Most Medicare Advantage plans have provider networks, and they may charge more or not cover services from out-of-network providers.

Before choosing a Medicare Advantage plan, find out whether your chosen doctor or provider is covered and identify how much you’ll pay. You can use the Medicare Plan Finder to compare the Medicare Advantage plans and their out-of-pocket costs in your area.

Return to Medicare Q&A main page

Kimberly Lankford is a contributing writer who covers Medicare and personal finance. She wrote about insurance, Medicare, retirement and taxes for more than 20 years at Kiplinger’s Personal Finance and has written for The Washington Post and Boston Globe . She received the personal finance Best in Business award from the Society of American Business Editors and Writers and the New York State Society of CPAs’ excellence in financial journalism award for her guide to Medicare.

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Assignment Of Benefits

What does assignment of benefits mean.

Assignment of benefits (AOB) is the official way an insured person asks their insurance company to pay a professional or facility for services rendered.

Insuranceopedia Explains Assignment Of Benefits

Assignment of benefits is a document that directs payment to a third party at the insured’s request. It becomes legitimate once both the insured party and their insurer have signed the AOB form. AOB is used in a number of insurance contexts, such as paying physicians or clinics through health insurance or paying contractors for repairs through a homeowner’s insurance policy.

Usually, AOBs are issued when the third party pursues it in the hopes that payment from the insurance company will be more certain and delivered more quickly than it would be from the insured.

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What Is the Assignment of Insurance Benefits?

An assignment of insurance benefits shares the ownership interest of an insurance policy with another party.

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1. What Is a Life Insurance Assignment?
2. Absolute Assignment of Life Insurance Policies
3. What Is the Collateral Assignment of a Life Insurance Policy?

Assigning insurance benefits is a legal procedure that gives another party permission to receive payments or benefits directly from your insurance company rather than you receiving the benefits yourself. Depending on the arrangement, you may be able to terminate the assignment at will, or be required to keep the arrangement in place until you meet certain conditions.

Health Insurance

When you require medical care, it's important to have health insurance in place to protect your financial well-being. If your health care provider does not have a direct contract with your insurance company, it may require you to fill out an assignment of benefits form allowing it to bill the insurance company directly for your medical treatments. You remain responsible for any deductibles and co-pays, however, and are ultimately responsible for any medical bills.

Income Loan

Whole life insurance policies with accumulating cash values can act as supplementary retirement income planning investments. When you wish to access the cash value in your policy, you can assign your policy to a bank in exchange for a loan. Typically the bank lends you up to a specified percentage of the policy's cash value, and it becomes the primary beneficiary of the death benefit up to and including the outstanding balance of the loan at your death. The advantage of such an arrangement is that the bank loan is not treated as taxable income, unlike a policy withdrawal, and you repay the bank loan with the tax-free death benefit.

Collateral Loan

If you are self-employed and wish to secure a loan for your business, you may be required by your lenders to purchase life insurance as an additional guarantee. Once the insurance is purchased you complete a assignment of benefits, sharing ownership control with the bank. You must pay the insurance premiums and cannot make any decisions affecting the policy without the written consent of the lender. If and when you pay off your business loan, the assignment is terminated and you regain full control of the policy.

Charitable Contribution

Life insurance can be purchased as a means to finance a charitable gift at death. There are several ways to set this up, one of which involves assigning the benefits to the charity immediately after purchase. The assignment is typically irrevocable, as this requires the charity's consent to make any changes to the policy. The advantage of such an assignment is that your premiums are tax-deductible as a charitable contribution. Upon your death, the charity receives the death benefit directly, without the money passing through your estate.

Massachusetts Avenue Surgery Center: Assignment of Insurance Benefits
Feeley and Driscoll, P.C.: Life insurance leads way to charitable contribution

Philippe Lanctot started writing for business trade publications in 1990. He has contributed copy for the "Canadian Insurance Journal" and has been the co-author of text for life insurance company marketing guides. He holds a Bachelor of Science in mathematics from the University of Montreal with a minor in English.

What is a life insurance assignment, absolute assignment of life insurance policies, what is the collateral assignment of a life insurance policy, how do i set up a trust fund with a life insurance policy, how much can i borrow against cash value, is whole-term life insurance with a retirement plan a good idea, how to finance a funeral, can you write off life insurance payments, can life insurance proceeds paid to a beneficiary be forced to pay the deceased's debts, taxation of death benefits paid on a life insurance policy, is life insurance taxed at payout, does life insurance count towards the two million for federal estate tax.

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Consumer Insight

what is the meaning of assignment of insurance

Sept. 13, 2023

Assignment of Benefits: Consumer Beware

You've just survived a severe storm, or a tornado and you've experienced some extensive damage to your home that requires repairs, including the roof. Your contractor is now asking for your permission to speak with your insurance company using an Assignment of Benefits. Before you sign, read the fine print. Otherwise, you may inadvertently sign over your benefits and any extra money you’re owed as part of your claim settlement.

The National Association of Insurance Commissioners (NAIC) offers information to help you better understand insurance, your risk and what to do in the event you need repairs after significant storm damage.

Be cautious about signing an Assignment of Benefits. An Assignment of Benefits, or an AOB, is an agreement signed by a policyholder that allows a third party—such as a water extraction company, a roofer or a plumber—to act on behalf of the insured and seek direct payment from the insurance company. An AOB can be a useful tool for getting repairs done, as it allows the repair company to deal directly with your insurance company when negotiating repairs and issuing payment directly to the repair company. However, an AOB is a legal contract, so you need to understand what rights you are signing away and you need to be sure the repair company is trustworthy.

With an Assignment of Benefits, the third party, like a roofing company or plumber, files your claim, makes the repair decision and collects insurance payments without your involvement.
Once you have signed an AOB, the insurer only communicates with the third party and the other party can sue your insurer and you can lose your right to mediation.
It's possible the third party may demand a higher claim payment than the insurer offers and then sue the insurer when it denies your claim.
You are not required to sign an AOB to have repairs completed. You can file a claim directly with your insurance company, which allows you to maintain control of the rights and benefits provided by your policy in resolving the claim.

Be on alert for fraud. Home repair fraud is common after a natural disaster. Contractors often come into disaster-struck regions looking to make quick money by taking advantage of victims.

It is a good idea to do business with local or trusted companies. Ask friends and family for references.
Your insurer may also have recommendations or a list of preferred contractors.
Always get more than one bid on work projects. Your adjuster may want to review estimates before you make repairs.

Immediately after the disaster, have an accurate account of the damage for your insurance company when you file a claim.

Before removing any debris or belongings, document all losses.
Take photos or video and make a list of the damages and lost items.
Save damaged items if possible so your insurer can inspect them, some insurance companies may have this as a requirement in their policy.

Most insurance companies have a time requirement for reporting a claim, so contact your agent or company as soon as possible. Your state insurance department can help you find contact information for your insurance company, if you cannot find it.

Insurance company officials can help you determine what damages are covered, start your claim and even issue a check to start the recovery process.
When reporting losses, you will need insurance information, current contact information and a home inventory or list of damaged and lost property . If you do not have a list, the adjuster will give you some time to make one. Ask the adjuster how much time you have to submit this inventory list. The NAIC Post Disaster Claims Guide has details on what you can do if you do not have a home inventory list.

After you report damage to your insurance company, they will send a claims adjuster to assess the damage at no cost to you . An adjuster from your insurance company will walk through and around your home to inspect damaged items and temporary repairs you may have made.

A public adjuster is different from an adjuster from your insurance company and has no ties to the insurance company.
They estimate the damage to your home and property, review your insurance coverage, and negotiate a settlement of the insurance claim for you.
Many states require public adjusters to be licensed. Some states prohibit public adjusters from negotiating insurance claims for you. In those states, only a licensed attorney can represent you.
You have to pay a public adjuster.
The NAIC Post Disaster Claims Guide has information on the different types of adjusters.

Once the adjuster has completed an assessment, they will provide documentation of the loss to your insurer to determine your claims settlement. When it comes to getting paid, you may receive more than one check. If the damage is severe or you are displaced from your home, the first check may be an emergency advance. Other payments may be for the contents of your home, other personal property, and structural damages. Please note that if there is a mortgage on your home, the payment for structural damage may be payable to you and your mortgage lender. Lenders may put that money into an escrow account and pay for repairs as the work is completed.

More information. States have rules governing how insurance companies handle claims. If you think that your insurer is not responding in a timely manner or completing a reasonable investigation of your claim, contact your state insurance department .

About the National Association of Insurance Commissioners

As part of our state-based system of insurance regulation in the United States, the National Association of Insurance Commissioners (NAIC) provides expertise, data, and analysis for insurance commissioners to effectively regulate the industry and protect consumers. The U.S. standard-setting organization is governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer reviews, and coordinate regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally.

Assignment of insurance policies and claims | Practical Law

Assignment of insurance policies and claims

Practical law uk practice note w-031-6021 (approx. 19 pages).

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Medicare Assignment: Everything You Need to Know

Medicare assignment.

Providers Accepting Assignment
Providers Who Do Not
Billing Options
Assignment of Benefits
How to Choose

Frequently Asked Questions

Medicare assignment is an agreement between Medicare and medical providers (doctors, hospitals, medical equipment suppliers, etc.) in which the provider agrees to accept Medicare’s fee schedule as payment in full when Medicare patients are treated.

This article will explain how Medicare assignment works, and what you need to know in order to ensure that you won’t receive unexpected bills.

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There are 35 million Americans who have Original Medicare. Medicare is a federal program and most medical providers throughout the country accept assignment with Medicare. As a result, these enrollees have a lot more options for medical providers than most of the rest of the population.

They can see any provider who accepts assignment, anywhere in the country. They can be assured that they will only have to pay their expected Medicare cost-sharing (deductible and coinsurance, some or all of which may be paid by a Medigap plan , Medicaid, or supplemental coverage provided by an employer or former employer).

It’s important to note here that the rules are different for the 29 million Americans who have Medicare Advantage plans. These beneficiaries cannot simply use any medical provider who accepts Medicare assignment.

Instead, each Medicare Advantage plan has its own network of providers —much like the health insurance plans that many Americans are accustomed to obtaining from employers or purchasing in the exchange/marketplace .

A provider who accepts assignment with Medicare may or may not be in-network with some or all of the Medicare Advantage plans that offer coverage in a given area. Some Medicare Advantage plans— health maintenance organizations (HMOs) , in particular—will only cover an enrollee’s claims if they use providers who are in the plan's network.

Other Medicare Advantage plans— preferred provider organizations (PPOs) , in particular—will cover out-of-network care but the enrollee will pay more than they would have paid had they seen an in-network provider.

Original Medicare

The bottom line is that Medicare assignment only determines provider accessibility and costs for people who have Original Medicare. People with Medicare Advantage need to understand their own plan’s provider network and coverage rules.

When discussing Medicare assignment and access to providers in this article, keep in mind that it is referring to people who have Original Medicare.

How to Make Sure Your Provider Accepts Assignment

Most doctors, hospitals, and other medical providers in the United States do accept Medicare assignment.

Provider Participation Stats

According to the Centers for Medicare and Medicaid Services, 98% of providers participate in Medicare, which means they accept assignment.

You can ask the provider directly about their participation with Medicare. But Medicare also has a tool that you can use to find participating doctors, hospitals, home health care services, and other providers.

There’s a filter on that tool labeled “Medicare-approved payment.” If you turn on that filter, you will only see providers who accept Medicare assignment. Under each provider’s information, it will say “Charges the Medicare-approved amount (so you pay less out-of-pocket).”

What If Your Provider Doesn’t Accept Assignment?

If your medical provider or equipment supplier doesn’t accept assignment, it means they haven’t agreed to accept Medicare’s approved amounts as payment in full for all of the services.

These providers can still choose to accept assignment on a case-by-case basis. But because they haven’t agreed to accept Medicare assignment for all services, they are considered nonparticipating providers.

Note that "nonparticipating" does not mean that a provider has opted out of Medicare altogether. Medicare will still pay claims for services received from a nonparticipating provider (i.e., one who does not accept Medicare assignment), whereas Medicare does not cover any of the cost of services obtained from a provider who has officially opted out of Medicare.

If a Medicare beneficiary uses a provider who has opted out of Medicare, that person will pay the provider directly and Medicare will not be involved in any way.

Physicians Who Have Opted Out

Only about 1% of all non-pediatric physicians have opted out of Medicare.

For providers who have not opted out of Medicare but who also don’t accept assignment, Medicare will still pay nearly as much as it would have paid if you had used a provider who accepts assignment. Here’s how it works:

Medicare will pay the provider 95% of the amount they would pay if the provider accepted assignment.
The provider can charge the person receiving care more than the Medicare-approved amount, but only up to 15% more (some states limit this further). This extra amount, which the patient has to pay out-of-pocket, is known as the limiting charge . But the 15% cap does not apply to medical equipment suppliers; if they do not accept assignment with Medicare, there is no limit on how much they can charge the person receiving care. This is why it’s particularly important to make sure that the supplier accepts Medicare assignment if you need medical equipment.
The nonparticipating provider may require the person receiving care to pay the entire bill up front and seek reimbursement from Medicare (using Form CMS 1490-S ). Alternatively, they may submit a claim to Medicare on behalf of the person receiving care (using Form CMS-1500 ).
A nonparticipating provider can choose to accept assignment on a case-by-case basis. They can indicate this on Form CMS-1500 in box 27. The vast majority of nonparticipating providers who bill Medicare choose to accept assignment for the claim being billed.
Nonparticipating providers do not have to bill your Medigap plan on your behalf.

Billing Options for Providers Who Accept Medicare

When a medical provider accepts assignment with Medicare, part of the agreement is that they will submit bills to Medicare on behalf of the person receiving care. So if you only see providers who accept assignment, you will never need to submit your own bills to Medicare for reimbursement.

If you have a Medigap plan that supplements your Original Medicare coverage, you should present the Medigap coverage information to the provider at the time of service. Medicare will forward the claim information to your Medigap insurer, reducing administrative work on your part.

Depending on the Medigap plan you have, the services that you receive, and the amount you’ve already spent in out-of-pocket costs, the Medigap plan may pay some or all of the out-of-pocket costs that you would otherwise have after Medicare pays its share.

(Note that if you have a type of Medigap plan called Medicare SELECT, you will have to stay within the plan’s network of providers in order to receive benefits. But this is not the case with other Medigap plans.)

After the claim is processed, you’ll be able to see details in your MyMedicare.gov account . Medicare will also send you a Medicare Summary Notice. This is Medicare’s version of an explanation of benefits (EOB) , which is sent out every three months.

If you have a Medigap plan, it should also send you an EOB or something similar, explaining the claim and whether the policy paid any part of it.

What Is Medicare Assignment of Benefits?

For Medicare beneficiaries, assignment of benefits means that the person receiving care agrees to allow a nonparticipating provider to bill Medicare directly (as opposed to having the person receiving care pay the bill up front and seek reimbursement from Medicare). Assignment of benefits is authorized by the person receiving care in Box 13 of Form CMS-1500 .

If the person receiving care refuses to assign benefits, Medicare can only reimburse the person receiving care instead of paying the nonparticipating provider directly.

Things to Consider Before Choosing a Provider

If you’re enrolled in Original Medicare, you have a wide range of options in terms of the providers you can use—far more than most other Americans. In most cases, your preferred doctor and other medical providers will accept assignment with Medicare, keeping your out-of-pocket costs lower than they would otherwise be, and reducing administrative hassle.

There may be circumstances, however, when the best option is a nonparticipating provider or even a provider who has opted out of Medicare altogether. If you choose one of these options, be sure you discuss the details with the provider before proceeding with the treatment.

You’ll want to understand how much is going to be billed and whether the provider will bill Medicare on your behalf if you agree to assign benefits (note that this is not possible if the provider has opted out of Medicare).

If you have supplemental coverage, you’ll also want to check with that plan to see whether it will still pick up some of the cost and, if so, how much you should expect to pay out of your own pocket.

A medical provider who accepts Medicare assignment is considered a participating provider. These providers have agreed to accept Medicare’s fee schedule as payment in full for services they provide to Medicare beneficiaries. Most doctors, hospitals, and other medical providers do accept Medicare assignment.

Nonparticipating providers are those who have not signed an agreement with Medicare to accept Medicare’s rates as payment in full. However, they can agree to accept assignment on a case-by-case basis, as long as they haven’t opted out of Medicare altogether. If they do not accept assignment, they can bill the patient up to 15% more than the Medicare-approved rate.

Providers who opt out of Medicare cannot bill Medicare and Medicare will not pay them or reimburse beneficiaries for their services. But there is no limit on how much they can bill for their services.

A Word From Verywell

It’s in your best interest to choose a provider who accepts Medicare assignment. This will keep your costs as low as possible, streamline the billing and claims process, and ensure that your Medigap plan picks up its share of the costs.

If you feel like you need help navigating the provider options or seeking care from a provider who doesn’t accept assignment, the Medicare State Health Insurance Assistance Program (SHIP) in your state may be able to help.

A doctor who does not accept Medicare assignment has not agreed to accept Medicare’s fee schedule as payment in full for their services. These doctors are considered nonparticipating with Medicare and can bill Medicare beneficiaries up to 15% more than the Medicare-approved amount.

They also have the option to accept assignment (i.e., accept Medicare’s rate as payment in full) on a case-by-case basis.

There are certain circumstances in which a provider is required by law to accept assignment. This includes situations in which the person receiving care has both Medicare and Medicaid. And it also applies to certain medical services, including lab tests, ambulance services, and drugs that are covered under Medicare Part B (as opposed to Part D).

In 2021, 98% of American physicians had participation agreements with Medicare, leaving only about 2% who did not accept assignment (either as a nonparticipating provider, or a provider who had opted out of Medicare altogether).

Accepting assignment is something that the medical provider does, whereas assignment of benefits is something that the patient (the Medicare beneficiary) does. To accept assignment means that the medical provider has agreed to accept Medicare’s approved fee as payment in full for services they provide.

Assignment of benefits means that the person receiving care agrees to allow a medical provider to bill Medicare directly, as opposed to having the person receiving care pay the provider and then seek reimbursement from Medicare.

Centers for Medicare and Medicaid Services. Medicare monthly enrollment .

Centers for Medicare and Medicaid Services. Annual Medicare participation announcement .

Centers for Medicare and Medicaid Services. Lower costs with assignment .

Centers for Medicare and Medicaid Services. Find providers who have opted out of Medicare .

Kaiser Family Foundation. How many physicians have opted-out of the Medicare program ?

Center for Medicare Advocacy. Durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) updates .

Centers for Medicare and Medicaid Services. Check the status of a claim .

Centers for Medicare and Medicaid Services. Medicare claims processing manual. Chapter 26 - completing and processing form CMS-1500 data set .

Centers for Medicare and Medicaid Services. Ambulance fee schedule .

Centers for Medicare and Medicaid Services. Prescription drugs (outpatient) .

By Louise Norris Norris is a licensed health insurance agent, book author, and freelance writer. She graduated magna cum laude from Colorado State University.

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What is Assignment of Benefits in Medical Billing?

doctor sitting at his desk on his laptop

An assignment of benefits is the act of signing documentation authorizing a health insurance company to pay a physician directly. In other words, the insurance company can pay claims without the direct involvement of the patient in the process. There are other situations where AOBs can be helpful, but we’ll focus on their use in relation to medical benefits.

If there isn’t an assignment of benefits agreement in place, the patient would be responsible for paying the other party directly from their own pocket, then filing a claim with their insurance provider to receive reimbursement. This could be time-consuming and costly, especially if the patient has no idea how to file a claim.

The document is typically signed by patients when they undergo medical procedures. The purpose of this form is to assign the responsibility of payment for any future medical bills that may arise after the procedure. It’s important to note that not all procedures require an AOB.

An assignment of benefits agreement might be utilized to pay a medical practitioner the patient didn’t choose, like an anesthesiologist. The patient may have picked a surgeon, but an anesthesiologist assigned on the day of the procedure might issue a separate bill. They’re, in essence, signing that anyone involved in their treatment can receive direct payment from the insurance carrier. It doesn’t have to go through the patient.

This document can also eliminate service fees surrounding processing. As a result, the patient can focus on medical treatment and recovery without being bogged down with the complexities of paying medical bills. The overall intent of an assignment of benefits agreement is to make the process more manageable for the patient, as they don’t need to haggle directly with their insurer.

List of Providers and Services

When the patient signs an AOB agreement, they give a third party right to obtain payment for services the provider performed, and medical billing services are a prime example of where they may sign an AOB agreement.

Ambulance services
Medical insurance claims
Drugs and pharmaceuticals
Diagnostic and clinical lab services
Emergency surgical center services
Dialysis supplies and equipment used in the home
Physician services for Medicare and Medicaid patients

Services of professionals other than a primary care physician, which includes:

Physician assistants
Clinical nurse specialists
Clinical social workers
Clinical psychologists
Certified registered nurse anesthetists

doctor at desk filling out forms on clipboard

Information Commonly Requested on Assignment of Benefits Form:

Signature of patient or person legally responsible
Signature of parent or legal guardian

How AOBs Affect the Medical Practitioner

A medical provider or their administrative staff may feel overwhelmed by the sheer number of forms patients must fill out prior to treatment. Demanding more paperwork from patients may be seen as an added burden on the managerial staff, as well as the patient. However, getting a signed AOB is vital in preserving the interests of everyone involved.

In addition to receiving direct payment from the insurance company without needing to go through the patient, a signed assignment of benefits form will help medical providers appeal denied and underpaid claims. They can ask that payments be made directly to them rather than through the patient. This makes the process more manageable for both the doctors and the patient.

Things to Bear in Mind

The patient gives their rights and benefits to third parties under their current health plan. Depending on the wording in the AOB, their insurer may not be allowed to contact them directly about their claims. In addition, the patient may be unable to negotiate settlements or approve payments on their behalf and enable third parties to endorse checks on behalf of the patient. Finally, when the patient signs an AOB, the insurer may sue the third parties involved in the dispute.

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Home > Finance > What Is An Assignee On A Life Insurance Policy?

What Is An Assignee On A Life Insurance Policy?

Published: October 14, 2023

Learn the role of an assignee on a life insurance policy and how it can impact your finances. Discover what it takes to become a finance-savvy assignee.

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Introduction, definition of assignee, role of assignee in a life insurance policy, rights and responsibilities of an assignee, process of assigning a life insurance policy, benefits of assigning a life insurance policy, considerations before assigning a life insurance policy, potential challenges and risks for assignees.

Life insurance is a crucial financial tool that provides protection and financial security to individuals and their loved ones in case of unexpected events. While the primary purpose of life insurance is to provide a death benefit to beneficiaries, policy owners also have the flexibility to assign or transfer their policy rights to another person or entity. This is where an assignee comes into play.

An assignee on a life insurance policy refers to the individual or entity who is designated to receive the policy benefits or be the recipient of any policy changes. Assigning a life insurance policy can be a strategic move for policyholders who want to transfer ownership rights or allocate the proceeds to a specific person or organization.

In this article, we will delve deeper into the role of an assignee in a life insurance policy, their rights and responsibilities, as well as the process of assigning a policy. We will also explore the benefits and considerations involved in assigning a life insurance policy, along with potential challenges and risks that assignees may encounter.

Understanding the concept of assignees in life insurance policies is essential for policyholders who may be considering transferring their policy rights or for beneficiaries who need to comprehend the implications of an assigned policy. Without further ado, let’s dive into the details of assignees on a life insurance policy.

An assignee on a life insurance policy is an individual or entity that is designated to receive the policy benefits or take over the ownership rights and responsibilities. When a policyholder assigns their life insurance policy, they transfer their rights to the assignee, who then becomes the new owner of the policy.

The assignee can be a spouse, child, relative, friend, or even a business entity such as a trust or corporation. The assignee can be named at the time the policy is initially taken out, or the policyholder can choose to assign the policy at a later date. In some cases, a policyholder may assign their policy to a lender or creditor as collateral for a loan.

It is important to note that the assignee is distinct from the beneficiary. The beneficiary is the person or entity who receives the death benefit proceeds upon the death of the insured. While the assignee assumes ownership of the policy, they may or may not be the same person as the beneficiary.

Assigning a life insurance policy can be a way for policyholders to ensure that the intended recipient receives the policy benefits or to transfer the financial responsibility and management of the policy to someone else.

Now that we have established the definition of an assignee in a life insurance policy, let’s explore their role in more detail.

The assignee plays a significant role in a life insurance policy once they have been designated as the new owner. Their responsibilities and authority may vary depending on the terms of the policy and the specific agreement between the policyholder and the assignee. Here are some key roles an assignee may have:

Policy Ownership: As the assignee, they become the legal owner of the life insurance policy. This means they have the rights to manage and make decisions regarding the policy, subject to any limitations or conditions outlined in the assignment agreement.
Premium Payments: The assignee is generally responsible for paying the premiums to keep the policy in force. They may choose to use their own funds or utilize the policy’s cash value, if available, to cover the premiums.
Beneficiary Designation: The assignee may have the authority to change the beneficiary designation if permitted by the policy terms. This gives them the ability to redirect the policy’s death benefit to another individual or entity.
Policy Modifications: Depending on the specific agreement, the assignee may have the power to make changes to the policy, such as increasing or decreasing the coverage amount, adjusting the policy term, or adding additional riders.
Access to Policy Information: As the new policy owner, the assignee has the right to access and review the policy information, including the policy terms, conditions, and any associated documents.
Claims Processing: In the event of the insured’s death, the assignee is responsible for initiating the claims process and ensuring that the death benefit proceeds are disbursed to the designated beneficiary.

It’s important to note that the specific roles and authority of the assignee can vary based on the terms of the assignment agreement. It is essential for both the policyholder and the assignee to have a clear understanding of their respective roles and responsibilities to avoid any confusion or disputes in the future.

Now that we have examined the role of an assignee in a life insurance policy, let’s explore the rights and responsibilities they have in more detail.

When an individual or entity becomes the assignee of a life insurance policy, they acquire certain rights and responsibilities associated with the policy. These rights and responsibilities can vary depending on the terms of the assignment agreement and the specific provisions of the policy. Let’s take a closer look at the rights and responsibilities of an assignee:

Rights of an Assignee:

Ownership Rights: As the assignee, they have the right to the policy benefits and any cash value that has accumulated. They can make decisions regarding the policy, such as changing the beneficiary, modifying coverage, or accessing policy information.
Premium Payments: The assignee has the right to receive premium payments from the policyholder, which they can use to keep the policy in force. They may also have the right to access the policy’s cash value, if available.
Policy Modifications: Depending on the terms of the assignment agreement, the assignee may have the right to make changes to the policy, such as adjusting the coverage amount, policy term, or adding additional riders.
Access to Policy Information: The assignee has the right to access and review the policy information, including the terms, conditions, and any associated documents. This allows them to stay informed about the policy’s provisions and make informed decisions.
Claims Processing: In the event of the insured’s death, the assignee has the right to initiate the claims process and receive the death benefit proceeds. They are responsible for disbursing the proceeds to the designated beneficiary, if applicable.

Responsibilities of an Assignee:

Premium Payments: As the assignee, they are responsible for making premium payments to keep the policy in force. This ensures that the policy remains active and the coverage continues.
Policy Management: The assignee has the responsibility to manage and maintain the policy. This includes reviewing the policy regularly, staying informed about any changes in the terms and conditions, and making decisions that align with the policyholder’s intentions.
Beneficiary Designation: If authorized by the assignment agreement, the assignee may have the responsibility to change the beneficiary designation if necessary. This involves ensuring that the intended recipient of the death benefit is correctly designated.
Communication: The assignee has the responsibility to maintain open communication with the policyholder, beneficiaries, and any other parties involved. This helps in addressing any questions, concerns, or changes that may arise regarding the policy.

It’s important for both the assignee and the policyholder to have a clear understanding of these rights and responsibilities to ensure a smooth and effective management of the policy. Now that we have explored the rights and responsibilities of an assignee, let’s move on to understand the process of assigning a life insurance policy.

The process of assigning a life insurance policy involves transferring the ownership rights and control of the policy from the policyholder to the assignee. While the specific steps may vary based on the insurance company and policy terms, the general process typically includes the following:

Review Policy Terms: The policyholder should carefully review the terms and conditions of their life insurance policy to understand any limitations or restrictions on assigning the policy.
Choose an Assignee: The policyholder selects an individual or entity to be the assignee. This can be a family member, friend, trust, or even a business entity. It is essential to consider the long-term goals and intentions when choosing an assignee.
Obtain Consent: The policyholder must obtain the consent of the proposed assignee to ensure they are willing to assume the responsibilities and obligations associated with the policy.
Prepare Assignment Agreement: The policyholder and the assignee should work together to prepare an assignment agreement. This is a legal document that outlines the terms of the assignment, including the assignee’s rights, responsibilities, and any potential compensation or considerations involved.
Notify the Insurance Company: The policyholder must contact their insurance company to inform them of the intention to assign the policy. The insurance company may require specific forms to be filled out, along with a copy of the assignment agreement.
Insurance Company Approval: The insurance company will review the assignment request and the assignment agreement to ensure they comply with their policies and regulations. Once approved, they will update their records to reflect the new assignee.
Update Beneficiary Designation: If the assignee is different from the original beneficiary, the policyholder may need to update the beneficiary designation to ensure that the intended recipient receives the death benefit.

It is crucial for both the policyholder and the assignee to consult with legal and financial professionals to ensure that the assignment process is conducted properly, adhering to any legal requirements and optimizing the financial outcomes for all parties involved.

Now that we have discussed the process of assigning a life insurance policy, let’s move on to explore the benefits of assigning a life insurance policy.

Assigning a life insurance policy can offer several benefits for both the policyholder and the assignee. Here are some key advantages of assigning a life insurance policy:

Control and Flexibility: Assigning a life insurance policy allows the policyholder to have control over who will manage and benefit from the policy. It provides flexibility to designate a specific person or entity to take over the ownership rights and responsibilities.
Estate Planning: Assigning a life insurance policy can be an effective estate planning strategy. It allows the policyholder to transfer assets outside of their estate, which may help in minimizing estate taxes and ensuring a smooth transfer of wealth to the intended recipients.
Creditor Protection: By assigning a life insurance policy to a trust or business entity, the policy cash value and death benefit may be protected from potential creditors. This provides an added layer of financial security for the assignee and the intended beneficiaries.
Financial Assistance: Assigning a life insurance policy can be beneficial in scenarios where the assignee needs financial assistance. For example, if the assignee is facing financial hardship or requires funds for a specific purpose, they may be able to access the policy’s cash value or even borrow against the policy.
Charitable Giving: Assigning a life insurance policy to a charitable organization can be a meaningful way to support a favorite cause. It allows the policyholder to make a significant charitable contribution, and the assignee, in this case, would be responsible for managing the policy and ensuring that the proceeds benefit the designated charity.

It’s important to note that the benefits of assigning a life insurance policy can vary depending on the specific circumstances and goals of the policyholder. Therefore, it is advisable to consult with financial advisors, estate planning professionals, and insurance experts to assess the suitability of assigning a policy and to maximize the potential benefits.

Now that we have explored the benefits of assigning a life insurance policy, let’s move on to discuss some considerations before making the decision to assign a policy.

Before deciding to assign a life insurance policy, it is crucial to carefully consider a few key factors. These considerations will help ensure that the decision aligns with your financial goals and meets your specific needs. Here are some important points to ponder:

Impact on Beneficiaries: Assigning a life insurance policy may have implications for the intended beneficiaries. It is essential to consider their needs and financial security before assigning the policy to someone else or an entity. Make sure to have open conversations with the beneficiaries to discuss any changes in the policy ownership and how it may impact them.
Future Financial Needs: Assess your own future financial needs before assigning a life insurance policy. Life circumstances can change, and it is crucial to determine if the policy’s cash value or death benefit might be required for your own financial stability or long-term goals. Balancing immediate financial needs with the desire to assign the policy is important.
Trustworthiness of the Assignee: Consider the trustworthiness and reliability of the proposed assignee. Assigning a life insurance policy involves transferring ownership rights and responsibilities, so it is crucial to choose someone who will effectively manage the policy and fulfill the agreed-upon obligations. Conduct thorough due diligence and consider seeking legal advice to ensure the assignee is the right choice.
Tax Implications: Assigning a life insurance policy may have tax implications. Consult with tax professionals to understand any potential tax consequences of the assignment, such as gift tax or estate tax considerations. Proper planning and knowledge of tax laws will help mitigate any unexpected tax liabilities.
Insurance Company Policy: Review the terms and conditions of your life insurance policy regarding assignments. Some policies may have restrictions or limitations on assigning a policy, and it’s important to understand these provisions. Contact your insurance company directly to clarify any concerns or questions related to the assignment process.
Legal Considerations: Assigning a life insurance policy involves legal documentation and agreements. It is advisable to consult with legal professionals who specialize in insurance and estate planning to ensure that the assignment is conducted in compliance with applicable laws and meets your specific needs.

Considering these factors will help you make an informed decision about whether assigning a life insurance policy is the right choice for you. Assess your individual situation, speak with professionals, and review your long-term goals to determine if assigning the policy aligns with your overall financial plan.

Now that we have explored the considerations before assigning a life insurance policy, let’s discuss some potential challenges and risks for assignees.

While assigning a life insurance policy can have its benefits, there are also potential challenges and risks that assignees should be aware of. Understanding these risks will help you make informed decisions and take necessary precautions. Here are some potential challenges and risks for assignees:

Financial Responsibility: As the assignee, you become responsible for paying the policy premiums to keep the coverage in force. Failure to pay the premiums can result in the policy lapsing, causing loss of coverage and potential loss of the policy’s cash value.
Potential Conflict: Assigning a life insurance policy may lead to conflicts, especially if the policyholder has multiple beneficiaries or if the assigned policy conflicts with other estate planning arrangements. It is important to communicate and coordinate with all involved parties to minimize potential disputes.
Changing Circumstances: Life circumstances can change, and the assigned policy may no longer align with the assignee’s needs or financial goals. Review the policy periodically to ensure it still meets your objectives. If necessary, consult with professionals to explore options for policy modifications or changes.
Loss of Control: By assigning a policy, you relinquish control over certain aspects of the policy. The assignee may need to consult the policyholder or beneficiaries before making any changes or important decisions. This loss of control should be carefully considered before proceeding with the assignment.
Insurance Company Approval: The insurance company typically has the final say in approving the assignment. They will review and confirm the assignment agreement to ensure compliance with their policies. If the assignment is not approved, it can impede the intended transfer of ownership.
Tax Implications: Assigning a life insurance policy may have tax consequences for the assignee, such as potential income tax on the policy’s cash value or estate tax implications. Consult with tax professionals before finalizing the assignment to fully understand these potential tax implications.

It is crucial for assignees to carefully weigh these challenges and risks against the potential benefits before accepting the assignment of a life insurance policy. Be proactive in communicating with the policyholder and beneficiaries, stay informed about policy details, and seek professional guidance to navigate any potential challenges or risks.

Now that we have discussed the potential challenges and risks for assignees, let’s wrap up our article.

Assigning a life insurance policy can be a strategic financial move that offers flexibility and control over the policy’s ownership and benefits. By designating an assignee, individuals can ensure that the policy proceeds are directed to the intended recipient or utilize the expertise of an entity to manage the policy. However, before proceeding with an assignment, it is important to carefully consider various factors.

Understanding the role, rights, and responsibilities of an assignee is vital to ensure a smooth transition and effective management of the policy. The assignee assumes ownership of the policy, enjoying benefits such as decision-making authority and control over premiums. They also have responsibilities, including making premium payments, managing the policy, and initiating claims if the insured passes away.

The process of assigning a life insurance policy involves reviewing policy terms, choosing an assignee, obtaining consent, preparing an assignment agreement, and notifying the insurance company. It is crucial to review the policy specifics and consult legal and financial professionals to ensure compliance with regulations and optimize financial outcomes.

Assigning a life insurance policy offers numerous benefits, such as control, estate planning opportunities, creditor protection, and financial assistance. However, there are considerations to keep in mind, including the impact on beneficiaries, future financial needs, and tax implications.

Assignees may face potential challenges, such as financial responsibility, conflicts of interest, changing circumstances, loss of control, and insurance company approval. These risks should be carefully assessed, and open communication with the policyholder and beneficiaries is essential to minimize disputes and ensure a smooth transition.

In conclusion, assigning a life insurance policy requires thoughtful deliberation and consultation with professionals. Assessing your financial goals, considering the needs of beneficiaries, and understanding the potential risks will help make an informed decision. Assigning a life insurance policy can provide peace of mind, but careful consideration and planning are essential to ensure the assigned policy aligns with your long-term financial goals.

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Assignment in Insurance Policy | Meaning | Explanation | Types

Table of Contents

1 What is Assignment in an Insurance Policy?
2 Who can make an assignment?
3 What happens to the ownership of the policy upon Assignment?
4 Can assignment be changed or cancelled?
5 What happens if the assignment dies?
6 What is the procedure to make an assignment?
7 Is it necessary to Inform the insurer about assignment?
8 Can a policy be assigned to a minor person?
9 Who pays premium when a policy is assigned?
10.1 1. Conditional Assignment
10.2 2. Absolute Assignment

What is Assignment in an Insurance Policy?

Assignment means a complete transfer of the ownership of the policy to some other person. Usually assignment is done for the purpose of raising a loan from a bank or a financial institution .

Assignment in Insurance Policy - Meaning, Explanation, Types

Assignment is governed by Section 38 of the Insurance Act 1938 in India. Assignment can also be done in favour of a close relative when the policyholder wishes to give a gift to that relative. Such an assignment is done for “natural love and affection”. An example, a policyholder may assign his policy to his sister who is handicapped.

Who can make an assignment?

A policyholder who has policy on his own life can assign the policy to another person. However, a person to whom a policy has been assigned can reassign the policy to the policyholder or assign it to any other person. A nominee cannot make an assignment of the policy. Similarly, an assignee cannot make a nomination on the policy which is assigned to him.

What happens to the ownership of the policy upon Assignment?

When a policyholder assign a policy, he loses all control on the policy. It is no longer his property. It is now the assignee’s property whether the policyholder is alive or dead, the assignee alone will get the policy money from the insurance company.

If the assignee dies, then his (assignee’s) legal heirs will be entitled to the policy money.

Can assignment be changed or cancelled?

An assignment cannot be changed or cancelled. The assignee can of course, reassign the policy to the policyholder who assigned it to him. He can also assign the policy to any other person because it is now his property. We can think of a bank reassigning the policy to the policyholder when their loan is repaid.

What happens if the assignment dies?

If the assignee dies, the assignment does not get cancelled. The legal heirs of the assignee become entitled to the policy money. Assignment is a legal transfer of all the interests the policyholder has in the policy to the assignee.

What is the procedure to make an assignment?

Assignment can be made only after issue of the policy bond. The policyholder can either write out the wording on the policy bond (endorsement) or write it on a separate paper and get it stamped. (Stamp value is the same, as the stamp required for the policy — Twenty paise per one thousand sum assured). When assignment is made by an endorsement on the policy bond, there is no need for stamp because the policy is already stamped.

Is it necessary to Inform the insurer about assignment?

Yes, it is necessary to give information about assignment to the insurance company. The insurer will register the assignment in its records and from then on recognize the assignee as the owner of the policy. If someone has made more than one assignment, then the date of the notice will decide which assignment has priority. In the case of reassignment also, notice is necessary.

Can a policy be assigned to a minor person?

Assignment can be made in favour of a minor person. But it would be advisable to appoint a guardian to receive the policy money if it becomes due during the minority of the assignee.

Who pays premium when a policy is assigned?

When a policy is assigned normally, the assignee should pay the premium, because the policy is now his property. In practice, however, premium is paid by the assignor (policyholder) himself. When a bank gives a loan and takes the assignment of a policy a security, it will ask the assignor himself to pay the premium and keep it in force. In the case of an assignment as a gift, the assignor would like to pay the premium because he has gifted the policy.

Types of assignment

Assignment may take two forms:

Conditional Assignment.
Absolute Assignment.

1. Conditional Assignment

It would be useful where the policyholder desires the benefit of the policy to go to a near relative in the event of his earlier death. It is usually effected for consideration of natural love and affection. It generally provides for the right to revert the policyholder in the event of the assignee predeceasing the policyholder or the policyholder surviving to the date of maturity.

2. Absolute Assignment

This assignment is generally made for valuable consideration. It has the effect of passing the title in the policy absolutely to the assignee and the policyholder in no way retains any interest in the policy. The absolute assignee can deal with the policy in any manner he likes and may assign or transfer his interest to another person.

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Assignment of Benefits for Contractors: Pros & Cons of Accepting an AOB

22 articles

Insurance , Restoration , Slow Payment

An illustrated assignment of benefits form in front of a damaged house

When a property owner files an insurance claim to cover a restoration or roofing project, the owner typically deals directly with the insurance company. They may not have the funds available to pay the contractor out of pocket, so they’re counting on that insurance check to cover the construction costs.

But insurance companies often drag their feet, and payments can take even longer than normal. Contractors often wish they could simply deal with the insurance company directly through an assignment of benefits. In some circumstances, an AOB can be an effective tool that helps contractors collect payment faster — but is it worth it?

In this article, we’ll explain what an assignment of benefits is, and how the process works. More importantly, we’ll look at the pros and cons for restoration and roofing contractors to help you decide if an AOB is worth it .

What is an assignment of benefits?

An assignment of benefits , or AOB, is an agreement to transfer insurance claim rights to a third party. It gives the assignee authority to file and negotiate a claim directly with the insurance company, without involvement from the property owner.

An AOB also allows the insurer to pay the contractor directly instead of funneling funds through the customer. AOBs take the homeowner out of the claims equation.

Here’s an example: A property owner’s roof is damaged in a hurricane. The owner contacts a restoration company to repair the damage, and signs an AOB to transfer their insurance rights to the contractor. The contractor, now the assignee, negotiates the claim directly with the insurance company. The insurer will pay the claim by issuing a check for the repairs directly to the restoration contractor.

Setting up an AOB

A property owner and contractor can set up an assignment of benefits in two steps:

The owner and the contractor sign an AOB agreement
The contractor sends the AOB to the insurance company

Keep in mind that many states have their own laws about what the agreement can or should include .

For example, Florida’s assignment of benefits law contains relatively strict requirements when it comes to an assignment of benefits:

The AOB agreements need to be in writing. The agreement must contain a bolded disclosure notifying the customer that they are relinquishing certain rights under the homeowners policy. You can’t charge administrative fees or penalties if a homeowner decides to cancel the AOB.
The AOB must include an itemized, per-unit breakdown of the work you plan to do. The services can only involve how you plan to make repairs or restore the home’s damage or protect the property from any further harm. A copy must be provided to the insurance company.
A homeowner can rescind an AOB agreement within 14 days of signing, or within 30 days if no work has begun and no start date was listed for the work. If a start date is listed, the 30-day rule still applies if substantial progress has not been made on the job.

Before signing an AOB agreement, make sure you understand the property owner’s insurance policy, and whether the project is likely to be covered.

Learn more: Navigating an insurance claim on a restoration project

Pros & cons for contractors

It’s smart to do a cost-benefit analysis on the practice of accepting AOBs. Listing pros and cons can help you make a logical assessment before deciding either way.

Pro: Hiring a public adjuster

An insurance carrier’s claims adjuster will inspect property damage and arrive at a dollar figure calculated to cover the cost of repairs. Often, you might feel this adjuster may have overlooked some details that should factor into the estimate.

If you encounter pushback from the insurer under these circumstances, a licensed, public adjuster may be warranted. These appraisers work for the homeowner, whose best interests you now represent as a result of the AOB. A public adjuster could help win the battle to complete the repairs properly.

Pro: More control over payment

You may sink a considerable amount of time into preparing an estimate for a customer. You may even get green-lighted to order materials and get started. Once the ball starts rolling, you wouldn’t want a customer to back out on the deal.

Klark Brown , Co-founder of The Alliance of Independent Restorers, concedes this might be one of the very situations in which an AOB construction agreement might help a contractor. “An AOB helps make sure the homeowner doesn’t take the insurance money and run,” says Brown.

Pro: Build a better relationship with the homeowner

A homeowner suffers a substantial loss and it’s easy to understand why push and pull with an insurance company might be the last thing they want to undertake. They may desire to have another party act on their behalf.

As an AOB recipient, the claims ball is now in your court. By taking some of the weight off a customer’s shoulders during a difficult period, it could help build good faith and further the relationship you strive to build with that client.

Learn more : 8 Ways for Contractors to Build Trust With a Homeowner

Con: It confuses payment responsibilities

Even if you accept an AOB, the property owner still generally bears responsibility for making payment. If the insurance company is dragging their feet, a restoration contractor can still likely file a mechanics lien on the property .

A homeowner may think that by signing away their right to an insurance claim, they are also signing away their responsibility to pay for the restoration work. This typically isn’t true, and this expectation could set you up for a more contentious dispute down the line if there is a problem with the insurance claim.

Con: Tighter margins

Insurance companies will want repairs made at the lowest cost possible. Just like you, carriers run a business and need to cut costs while boosting revenue.

While some restoration contractors work directly with insurers and could get a steady stream of work from them, Brown emphasizes that you may be sacrificing your own margins. “Expect to accept work for less money than you’d charge independently,” he adds.

The takeaway here suggests that any contractor accepting an AOB could subject themselves to the same bare-boned profit margins.

Con: More administrative work

Among others, creating additional administrative busywork is another reason Brown recommends that you steer clear of accepting AOBs. You’re committing additional resources while agreeing to work for less money.

“Administrative costs are a burden,” Brown states. Insurers may reduce and/or delay payments to help their own bottom lines. “Insurers will play the float with reserves and claims funds,” he added. So, AOBs can be detrimental to your business if you’re spending more while chasing payments.

Con: Increase in average collection period

Every contractor should use some financial metrics to help gauge the health of the business . The average collection period for receivables measures the average time it takes you to get paid on your open accounts.

Insurance companies aren’t known for paying claims quickly. If you do restoration work without accepting an AOB, you can often take action with the homeowner to get paid faster. When you’re depending on an insurance company to make your payment, rather than the owner, collection times will likely increase.

The literal and figurative bottom line is: If accepting assignment of benefits agreements increases the time it takes to get paid and costs you more in operational expense, these are both situations you want to avoid.

Learn more: How to calculate your collection effectiveness

AOBs and mechanics liens

A mechanics lien is hands down a contractor’s most effective tool to ensure they get paid for their work. Many types of restoration services are protected under lien laws in most states. But what happens to lien rights when a contractor accepts an assignment of benefits?

An AOB generally won’t affect a contractor’s ability to file a mechanics lien on the property if they don’t receive payment. The homeowner is typically still responsible to pay for the improvements. This is especially true if the contract involves work that wasn’t covered by the insurance policy.

However, make sure you know the laws in the state where your project is located. For example, Florida’s assignment of benefits law, perhaps the most restrictive in the country, appears to prohibit an AOB assignee from filing a lien.

Florida AOB agreements are required to include language that waives the contractor’s rights to collect payment from the owner. The required statement takes it even further, stating that neither the contractor or any of their subs can file a mechanics lien on the owner’s property.

On his website , Florida’s CFO says: “The third-party assignee and its subcontractors may not collect, or attempt to collect money from you, maintain any action of law against you, file a lien against your property or report you to a credit reporting agency.”

That sounds like a contractor assignee can’t file a lien if they aren’t paid . But, according to construction lawyer Alex Benarroche , it’s not so cut-and-dry.

“Florida’s AOB law has yet to be tested in court, and it’s possible that the no-lien provision would be invalid,” says Benarroche. “This is because Florida also prohibits no-lien clauses in a contract. It is not legal for a contractor to waive their right to file a lien via an agreement prior to performance.”

Learn more about no-lien clauses and their enforceability state-by-state

Remember that every state treats AOBs differently, and conflicting laws can create additional risk. It’s important to consult with a construction lawyer in the project’s state before accepting an assignment of benefits.

Best practices for contractors

At the end of the day, there are advantages and disadvantages to accepting an assignment of benefits. While it’s possible in some circumstances that an AOB could help a contractor get paid faster, there are lots of other payment tools that are more effective and require less administrative costs. An AOB should never be the first option on the table .

If you do decide to become an assignee to the property owner’s claim benefits, make sure you do your homework beforehand and adopt some best practices to effectively manage the assignment of benefits process. You’ll need to keep on top of the administrative details involved in drafting AOBs and schedule work in a timely manner to stay in compliance with the conditions of the agreement.

Make sure you understand all the nuances of how insurance works when there’s a claim . You need to understand the owner’s policy and what it covers. Home insurance policy forms are basically standardized for easy comparisons in each state, so what you see with one company is what you get with all carriers.

Since you’re now the point of contact for the insurance company, expect more phone calls and emails from both clients and the insurer . You’ll need to have a strategy to efficiently handle ramped-up communications since the frequency will increase. Keep homeowners and claims reps in the loop so you can build customer relationships and hopefully get paid faster by the insurer for your work.

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What is Assignment and Nomination in Life Insurance?

‘Assignment’ and ‘Nomination’ are two most common terms used in a life insurance policy document. Let us understand the importance of these two terms in-detail.

By Future Generali Updated On Oct 06, 2022

What is Assignment and Nomination in Life Insurance?

Your life insurance policy is a contract between you (insured) and the insurance company (insurer). The contract is filled with jargon. To the extent possible, we must understand all the terms mentioned in the policy bond (certificate). ‘Assignment’ and ‘Nomination’ are two most common terms used in the insurance world.

For instance, in the event that you plan to apply for a home loan, your home loan provider will surely use these terms. Hence, it is best to be sure and understand exactly what the terms mean before you make a decision to buy the policy.

What is assignment in life insurance?

A life insurance policy can be assigned when rights of one person are transferred to another. The rights to your insurance policy can be transferred to someone else for various reasons. The process is known as assignment.

An “assignor” (policyholder) is the person who assigns the insurance policy. An “assignee” is the person to whom the policy rights have been transferred, i.e. the person to whom the policy has been assigned.

In the event rights are transferred from an Assignor to an Assignee, the rights of the policyholder are canceled, and the Assignee becomes the owner of the insurance policy.

People often assign their life insurance policies to banks. A bank becomes the policy owner in this case, while the original policyholder continues to be the life assured whose death may be claimed by either the bank or the policy owner.

Types of Assignment

There are two ways to assign an insurance policy. They are as follows:

1. Absolute Assignment

During this process, the rights of the assignor (policyholder) will be completely transferred to the assignee (person to whom the policy rights have been transferred). It is not subject to any conditions.

As an example, Mr. Rajiv Tripathi owns a Rs 1 Crore life insurance policy. Mr. Tripathi wants to gift his wife this policy. Specifically, he wants to make “absolute assignment” of the policy in his wife's name, so that the death benefit (or maturity proceeds) can be paid directly to her. After the absolute assignment has been made, Mrs. Tripathi will own this policy, and she will be able to transfer it to someone else again.

2. Conditional Assignment

As part of this type of assignment, certain conditions must be met before the transfer of rights occurs from the Assignor to the Assignee. The Policy will only be transferred to the Assignee if all conditions are met.

For instance, a term insurance policy of Rs 50 Lakh is owned by Mr. Dinesh Pujari. Mr. Pujari is applying for a home loan of Rs 50 Lakh. For the loan, the banker asked him to assign the term policy in their name. To acquire a home loan, Mr. Pujari can assign the insurance policy to the home loan company. In the event of Mr. Pujari’s death (during the loan tenure), the bank can collect the death benefit and get their money back from the insurance company.

Mr. Pujari can get back his term insurance policy if he repays the entire amount of his home loan. As soon as the loan is repaid, the policy will be transferred to Mr. Pujari.

In the event that the insurer receives a death benefit that exceeds the outstanding loan balance, the bank will be paid from the difference between the death benefit and the loan and the balance will be paid directly to the nominee. In the above example, the remaining amount (if any) will be paid to Mr. Pujari’s beneficiaries (legal heirs/nominee).

Key Points to know Note About Assignment

In regards to the assignment, the following points should be noted:

A policy assignment transfers/changes only the ownership, not the risk associated with it. The person assured thus becomes the insured.
The assignment may lead to cancellation of the nomination in the policy only when it is done in favour of the insurance company due to a policy loan.
Assignment for all insurance plans except for the pension plan and the Married Women's Property Act (MWP), can be done.
A policy contract endorsement is required to effect the assignment.

What is nomination in life insurance?

Upon the death of the life assured, the nominee/ beneficiary (generally a close relative) receives the benefits. Policyholders appoint nominees to receive benefits. Under the Insurance Act, 1938, Section 39 governs the nomination process.

Types of Nominees

In a life insurance policy, the policyholder names someone who will receive the benefits in the event of the life assured's death. Here are a few types of nominees:

1. Beneficial Nominees

In accordance with the law, the beneficiary of the claimed benefits will be any immediate family member nominated by the policyholder (like a spouse, children, or parents). Beneficiary nominees are limited to immediate family members of the beneficiary.

2. Minor Nominees

It is common for individuals to name their children as beneficiaries of their life insurance policies. Minor nominees (under the age of 18) are not allowed to handle claim amounts. Hence, the policyholder needs to designate a custodian or appointee. Payments are made to the appointee until the minor reaches the age of 18.

3. Non-family Nominees

Nominees can include distant relatives or even friends as beneficiaries of a life insurance policy.

4. Changing Nominees

It is okay for policyholders to change their nominees as often as they wish, but the latest nominee should take priority over all previous ones.

Key Points to Note About Nomination

In regards to the nomination, the following points should be noted:

In order to nominate, the policyholder and life assured must be the same.
In the case of a different policyholder and life assured, the claim benefits will be paid to the policyholder.
Nominations cannot be changed or modified.
The policy can have more than one nominee.
As part of successive nominations, if the life assured appoints person “A” as the first person to receive benefits. Now, in the event of the life assured’s death after person “A” dies, the claim benefits will be given to person “B”. The benefits will be available to Nominee “C” if Nominee “A” and Nominee “B” have passed away.

What is the difference between nomination and assignment?

Let's talk about the differences between assignment and nomination.

Nomination and Assignment serve different purposes. The nomination protects the interests of the insured as well as an insurer in offering claim benefits under the life insurance policy. On the other hand, assignment protects the interests of an assignee in availing the monetary benefits under the policy. The policyholder should be aware of both of them before buying life insurance.

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Collateral assignment of life insurance

S ecured loans are often used by individuals needing financial resources for any reason, whether it’s to fund a business, remodel a home or pay medical bills. One asset that may be used for a secured loan is life insurance. Although there are pros and cons to this type of financial transaction, it can be an excellent way to access needed funding. Bankrate’s insurance editorial team discusses what a collateral assignment of life insurance is and when it might—or might not—be the best loan option for you.

What is collateral assignment of life insurance?

A collateral assignment of life insurance is a method of securing a loan by using a life insurance policy as collateral . If you pass away before the loan is repaid, the lender can collect the outstanding loan balance from the death benefit of your life insurance policy . Any remaining funds from the death benefit would then be disbursed to the policy’s designated beneficiary(ies).

Why use life insurance as collateral?

Collateral assignment of life insurance may be a useful option if you want to access funds without placing any of your assets, such as a car or house, at risk. If you already have a life insurance policy, it can be a simple process to assign it as collateral. You may even be able to use your policy as collateral for more than one loan, which is called cross-collateralization, if there is enough value in the policy.

Collateral assignment may also be a credible choice if your credit rating is not high, which can make it difficult to find attractive loan terms. Since your lender can rely on your policy’s death benefit to pay off the loan if necessary, they are more likely to give you favorable terms despite a low credit score.

Pros and cons of using life insurance as collateral

If you are considering collateral assignment, here are some pros and cons of this type of financial arrangement.

It may be an affordable option, especially if your life insurance premiums are less than your payments would be for an unsecured loan with a higher interest rate.
You will not need to place personal property, such as your home, as collateral, which you would need to do if you take out a secured loan. Instead, if you pass away before the loan is repaid, lenders will be paid from the policy’s death benefit. Any remaining payout goes to your named beneficiaries.
You may find lenders who are eager to work with you since life insurance is generally considered a good choice for collateral.
The amount that your beneficiaries would have received will be reduced if you pass away before the loan is paid off since the lender has first rights to death benefits.
You may not be able to successfully purchase life insurance if you are older or in poor health.
If you are using a permanent form of life insurance as collateral, there may be an impact on your ability to use the policy's cash value during the life of the loan. If the loan balance and interest payments exceed the cash value, it can erode the policy's value over time.

What types of life insurance can I use as collateral for a loan?

You may use either of the main types of life insurance— term and permanent —for collateral assignment. If you are using term life insurance, you will need a policy with a term length that is at least as long as the term of the loan. In other words, if you have 20 years to pay off the loan, the term insurance you need must have a term of at least 20 years.

Subcategories of permanent life insurance, such as whole life , universal life and variable life, may also be used. Depending on lender requirements, you may be able to use an existing policy or could purchase a new one for the loan. A permanent policy with cash value may be especially appealing to a lender, considering the added benefit of the cash reserves they could access if necessary.

How do I take out a loan using a collateral assignment of life insurance?

If you already have enough life insurance to use for collateral assignment, your next step is to find a lender who is willing to work with you. If you don’t yet have life insurance, or you don’t have enough, consider the amount of coverage you need and apply for a policy . You may need to undergo a medical exam and fill out an application .

Once your policy has been approved, ask your insurance company or agent for a collateral assignment form, which you will complete and submit with your loan application papers. The form names your lender as an assignee of the policy—meaning that they have a stake in its benefits for as long as the loan exists. You will also name beneficiaries or a single beneficiary, who will receive whatever is left over from the death benefits after the loan is repaid.

Note that you will need to stay current on your life insurance premium payments while the collateral assignment is active. This will be stated in the loan agreement, and failure to do so could have serious repercussions.

Alternatives to life insurance as collateral

If you are considering a collateral assignment of life insurance, there are a few alternative funding options that might be worth exploring. Since many factors determine each option, working with a financial advisor may be the best way to find the ideal solution for your situation.

Unsecured loan

Depending on your situation, an unsecured loan may be more affordable than a secured loan with life insurance as collateral. This is more likely to be the case if you have good enough credit to qualify for a low-interest rate without having to offer any type of collateral. There are many different types of unsecured loans, including credit cards and personal loans.

Secured loan

In addition to life insurance, there are other items you can use as collateral for a secured loan . Your home, a car or a boat, for example, could be used if you have enough equity in them. Typically, secured loans are easier to qualify for than unsecured, since they are not as risky for the lender, and you are likely to find a lower interest rate than you would with an unsecured loan. The flip side, of course, is that if you default on the loan, the lender can take the asset that you used to secure it and sell it to recoup their losses.

Life insurance loan

Some permanent life insurance policies accumulate cash value over time that you can use in different ways. If you have such a policy, you may be able to partially withdraw the cash value or take a loan against your cash value. However, there are implications to using the cash value in your life insurance policy, so be sure to discuss this solution with a life insurance agent or your financial advisor before making a decision.

Home equity line of credit (HELOC)

A home equity line of credit (HELOC) is a more flexible way to access funds than a standard secured loan. While HELOCs carry the downside of risking your home as collateral, you retain more control over the amount you borrow. Instead of receiving one lump sum, you will have access to a line of credit that you can withdraw from as needed. You will only have to pay interest on the actual amount borrowed.

Frequently asked questions

Finding the best life insurance company is important for you and your family. What works well for others might not fit your needs or current budget. First, find out how much life insurance you need by speaking with a financial advisor and using this life insurance calculator as a starting point. Similar to shopping for car insurance, you might want to look at customer service and claim reviews and the company’s financial stability ratings, then get quotes from several providers and ask for recommendations from people you trust.

Life insurance can be used as collateral for auto or home loans, but it is also commonly used for small business loans . Often small business owners have to use most of their private money to fund their businesses. When it is time to expand, upgrade technology or maybe hire more staff, they may need a loan to invest in their business that won’t put their remaining personal finances at risk.

It is typical for borrowers to put up their real estate or vehicles as collateral since they are usually our most valuable assets. Some loan companies may accept cash in the form of money market accounts or certificates of deposit (CD) , investments or valuable items such as jewelry, art and collectibles. Valuables are usually subject to an appraisal before they are accepted.

Although we have talked above about collateral assignment of your life insurance policy to secure a loan, there is another type of assignment called absolute assignment. With collateral assignment, you still exercise control over the policy, and the assignment only exists as long as the loan is active. Absolute assignment, however, transfers all policy rights to the lender, who becomes the new owner of the policy. The original policyholder gives up their right to name beneficiaries or access the policy’s cash value. This arrangement is more like a sale of the policy , with the new owner assuming all rights and responsibilities over it.

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Government & Policy

Assignee: What it is, How it Works, Types

Michelle P. Scott is a New York attorney with extensive experience in tax, corporate, financial, and nonprofit law, and public policy. As General Counsel, private practitioner, and Congressional counsel, she has advised financial institutions, businesses, charities, individuals, and public officials, and written and lectured extensively.

Ariel Courage is an experienced editor, researcher, and former fact-checker. She has performed editing and fact-checking work for several leading finance publications, including The Motley Fool and Passport to Wall Street.

What Is an Assignee?

An assignee is a person, company, or entity who receives the transfer of property, title, or rights from another according to the terms of a contract. The assignee receives the transfer from the assignor. For example, an assignee may receive the title to a piece of real estate from an assignor.

Key Takeaways

An assignee is a person, company, or entity who receives the transfer of property, title, or rights from a contract.
The assignee receives the transfer from the assignor.
An assignee may be the recipient of an assignment, a liability, or appointed to act in the stead of another person or entity.
The assignee typically will hold the rights of power of attorney only for a specified time or for particular circumstances.
Once the time has expired or the circumstances have been resolved, the assignee would automatically relinquish those rights.
Not all assignment contracts are required to be made in writing, but they often are.

How an Assignee Works

An assignee may be the recipient of an assignment, a liability, or appointed to act in the stead of another person or entity. For example, an executor of an estate may be appointed through a will left by a decedent.

Types of Assignees

Assignee in real estate.

An assignee is the recipient of a title when a deed is signed to confer ownership of property in a transaction. A tenant might choose to transfer their property rights to an assignee who would assume duties for paying rent and tending to the property. There may be limits to the rights and liabilities that are granted to an assignee based on the nature of the transfer or assignment of rights.

For example, an assignee might take on the property rights from a tenant who vacated a rental property, but the tenant may still be liable if the assignee does not make rent payments on time. An assignee who takes title and ownership of real estate might not have certain rights to use the property any way they wish. There may be rights of ingress and egress that must be negotiated with adjacent property owners who hold surrounding land parcels. The assignee could receive certain rights that run with the land when they are granted the title.

Assignment by Power of Attorney

Power of attorney may be assigned to a person to tend to certain affairs for a person while they are out of the country or not capable of taking action for themselves. The assignment of power of attorney can grant broad rights or be limited in scope by the terms set by the assignor. The rights could be for the specific handling of a contract or business deal that the assignor cannot be present for.

The assignee typically will hold the rights of power of attorney only for a specified time or particular circumstances. Once the time has expired or the circumstances have been resolved, the assignee would automatically relinquish those rights. It is possible that the terms of power of attorney might allow an assignee to act in their self-interest rather than for the interests of the assignor.

Assignee in an Insurance Policy

In the context of a life insurance policy, interest in a policy can be transferred from the policyholder to a lender or relative by assignment of the policy. In this case, the policyholder is the assignor and the person in whose favor the policy has been assigned is called the assignee.

Assignee in a Contract

When one party to a contract—the assignor—hands off the contract's obligations and benefits to a different party—the assignee—this is known as an assignment of contract. In this situation, the assignee assumes all the rights and responsibilities of the contract from the assignor. All, or a portion, of a letter of credit can be assigned to a third party to pay vendors and suppliers.

Assignee in a Loan

An assignee is a person or a company that buys your loan. For example, an auto dealer that extends credit to individuals may sell their loans to a bank. In this case, the bank is the assignee and the auto dealer is the assignor. If your loan has been sold, you owe money to whoever owns your loan. In the event that responsible parties fail to meet their loan obligations, the assignee has a lien on the vehicle and can repossess it.

Not all assignment contracts are required to be made in writing, but they often are. Assignment contracts may also need to be notarized and witnessed in order to be valid. The assignment of property and collateral for loans must be in writing. Note that not all rights, contracts, or other property are assignable; many contracts, particularly real estate leases and personal service agreements, explicitly prohibit assignment.

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Why the federal government is paying upfront to fix the Baltimore bridge

The federal government stepping in to pay to rebuild the bridge doesn’t necessarily mean taxpayers will cover the entire bill.

After President Joe Biden said the federal government would pay to replace Baltimore’s Francis Scott Key Bridge, a project estimated to cost from $400 million to over $1 billion , some social media users questioned why the company that owned the ship isn’t footing the bill.

Biden, in March 26 remarks after the accident, said the federal government “will pay for the entire cost of reconstructing that bridge,” and he expected congressional support for that effort.

On social media, users expressed outrage.

“That ship was commissioned by a Danish company. It was operating under a Singapore flag … President Biden thinks the American taxpayers should foot the bill to clean up the mess and rebuild the bridge. I think there’s a foreign company that owes us a bridge!” read three Facebook posts that shared the same graphic.

“Why are WE responsible for paying for this!! Make it make sense!!” another Facebook post said.

Former House Speaker Newt Gingrich, R-Ga., criticized Biden, writing in an X post , “Why add a billion dollars to US debt when the big insurance companies exist for precisely this purpose?”

The ship that struck the bridge was owned by Singapore-based company Grace Ocean Private Ltd. It was managed by Singapore-based ship management company Synergy Marine Group, and chartered by Danish shipping company Maersk.

Grace Ocean Private Ltd. and Synergy Marine Group filed a court petition April 1 seeking to cap their liability at about $43.6 million.

The federal Department of Transportation on March 28 announced $60 million in “quick release” Emergency Relief funds for the Maryland Department of Transportation Department to begin rebuilding the bridge, describing it as an “initial down payment of funds.”

Getting the bridge repaired and the Port of Baltimore open to ship traffic is an economic imperative for Maryland and for the U.S., Maryland and federal officials said.

The bridge carried more than 30,000 vehicles a day, state officials said. The Port of Baltimore in 2021 was the 17th largest in the U.S. in terms of annual total tonnage of cargo, U.S. Department of Transportation data shows.

Maryland’s Democratic governor, Wes Moore, said March 31 on “Fox News Sunday” that the bridge collapse isn’t affecting Maryland’s economy alone, but also states across the country.

The support Baltimore has received “isn’t because anyone is trying to do Maryland a favor,” Moore said. “It’s because the national economy relies on the Port of Baltimore being up and running,”

Where will the money come from and will feds foot the entire bill?

The federal government stepping in to pay to rebuild the bridge doesn’t necessarily mean taxpayers will cover the entire bill.

When reporters asked Biden March 26 whether the company that owned the ship should be held responsible, Biden said , “That could be, but we’re not going to wait if that happened. We’re going to pay for it to get the bridge rebuilt and open.”

Transportation Secretary Pete Buttigieg said at a March 27 news briefing that “any private party that is found responsible and liable will be held accountable” for the bridge accident.

Analysts say insured losses including for bridge repair and business interruption could amount to up to $4 billion. But lawsuits in similar disasters have taken years to settle.

Peter Knudson, a National Transportation Safety Board spokesperson, said its investigation is expected to last one to two years.

Sen. Chris Van Hollen, D-Md., said on ABC’s “This Week with George Stephanopoulos” that “The federal government will pay 90% of the costs,” and he plans to introduce legislation to cover the other 10%.

Treasury Secretary Janet Yellen in a March 27 MSNBC interview, said money from the 2021 Bipartisan Infrastructure Law could help pay some of the costs, but said she expected insurance to cover those costs partly.

Buttigieg said March 31 on CBS’ “Face the Nation” that more than the initial $60 million in emergency released funding will come, but “it is possible we may need to turn to Congress to supplement that fund. That has happened in the past.”

Although some Republicans in Congress have expressed opposition to paying for the repairs, Senate Minority Leader Mitch McConnell, R-Ky., said in an April 1 radio interview that the federal government will pay “the lion’s share” of the cost to replace the bridge.

Buttigieg pointed to bipartisan support for a $250 million reconstruction package following 2007 collapse of the Interstate N35 in Minnesota.

The bridge’s August 2007 collapse near downtown Minneapolis took down 111 vehicles, killing 13 people and injuring 145. The NTSB concluded that the probable cause was “inadequate load capacity, due to a design error” of some of the bridge’s structures.

With the state estimated to lose about $60 million in economic output in 2007 and 2008 because of the bridge’s absence, Congress three days after the bridge’s collapse authorized the reconstruction funding. Two days after that, former President George W. Bush signed it into law. The bridge was completed in 13 months.

URS Corp., the engineering company tasked to evaluate the bridge before it collapsed, agreed to pay $52.4 million to the tragedy’s victims.

Federal government has paid up front for similar disasters

Steve Ellis, president of the Taxpayers for Common Sense, an independent group that analyzes federal spending, said the federal government often intervenes after disasters to pay for the immediate response.

“In this case, where there are other insured actors, like the shipping line, the federal government should go after them for reimbursement and penalties,” Ellis said.

Andy Winkler, director of the Bipartisan Policy Center’s infrastructure project, said the Biden administration’s quick offer of assistance in the Baltimore bridge collapse does not preclude the federal government from recouping costs should a private sector party be found responsible.”

Here are some examples of the federal government paying up front and seeking reimbursement later:

Deepwater Horizon and Exxon Valdez oil spills: Ellis and Winkler each pointed to the 2010 Deepwater Horizon oil spill in the Gulf of Mexico, and Ellis also noted the 1989 Exxon Valdez oil spill in Alaska as examples of the federal government contributing to upfront costs and recovering moneymore through settlements with the companies responsible. Those settlements took six years to reach in the Deepwater spill and two in the Exxon spill.

The Deepwater spill, triggered by an oil rig explosion that killed 11 people, was the largest U.S. marine oil spill ever, releasing about 130 million gallons of oil into the sea and soiling five states coastlines. The federal government reached a $20.8 billion settlement with BP, the largest environmental settlement in U.S. history, that was approved in 2016 by a federal judge.

“The federal government provided assistance, including funding to support cleanup efforts, all while aggressively pursuing compensation for all damage,” Winkler said.

Before Deepwater Horizon, the 1989 Exxon Valdez oil spill had been the worst in U.S. history. An Exxon oil tanker struck a reef in Prince William Sound, Alaska, spilling 11 million gallons of crude oil into the water. Exxon agreed to pay $1 billion in fines and damages, the Enviromental Protection Agency said in 1991 . Overall, Exxon said it has paid $4.3 billion after the accident in compensatory and cleanup payments, settlements and fines.

East Palestine train derailment: In 2023, after a train derailed in East Palestine, Ohio, the state led the initial emergency operation with federal and local support.

Days later, the EPA ordered its operator, Norfolk Southern, to reimburse the agency for cleanup.

Norfolk Southern claimed that companies responsible for the destroyed tank cars and spilled chemicals should share cleanup costs, which it said amounted to more than $1.1 billion. But in March , a federal judge ruled that solely Norfolk Southern should fund the cleanup.

The $1.1 billion figure reflects any costs charged to Norfolk because of the derailment, as well as the more than $104 million paid directly to residents and the East Palestine community, Norfolk spokesperson Connor Spielmaker told PolitiFact.

The EPA told PolitiFact in an April 1 email it will send Norfolk Southern a bill for all of its personnel, time and resources spent.

Washington highway bridge collapse: In Washington state in May 2013, the Interstate 5 Skagit River Bridge in Mount Vernon, about halfway between Seattle and the Canadian border, collapsed after a wide-load-bearing 18-wheeler crashed into the bridge. A month later, the U.S. Department of Transportation’s Federal Highway Administration released $15.6 million from emergency funds to pay for the repairs, but required the state to seek reimbursement, The Seattle Times reported .

In 2019, the Washington Supreme Court ruled that Mullen Trucking and Motorways Trucking, the two companies responsible for the crash, were responsible for paying $17 million to pay the repair costs instead of taxpayers, The Seattle Times said .

PolitiFact Senior Correspondent Amy Sherman and Researcher Caryn Baird contributed to this story.

This fact check was originally published by PolitiFact , which is part of the Poynter Institute. See the sources for this fact check here .

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Updated at 2:44 p.m. ET on April 6, 2024.

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MY FIRST GLIMPSE of Royal Caribbean’s Icon of the Seas, from the window of an approaching Miami cab, brings on a feeling of vertigo, nausea, amazement, and distress. I shut my eyes in defense, as my brain tells my optic nerve to try again.

The ship makes no sense, vertically or horizontally. It makes no sense on sea, or on land, or in outer space. It looks like a hodgepodge of domes and minarets, tubes and canopies, like Istanbul had it been designed by idiots. Vibrant, oversignifying colors are stacked upon other such colors, decks perched over still more decks; the only comfort is a row of lifeboats ringing its perimeter. There is no imposed order, no cogent thought, and, for those who do not harbor a totalitarian sense of gigantomania, no visual mercy. This is the biggest cruise ship ever built, and I have been tasked with witnessing its inaugural voyage.

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“Author embarks on their first cruise-ship voyage” has been a staple of American essay writing for almost three decades, beginning with David Foster Wallace’s “A Supposedly Fun Thing I’ll Never Do Again,” which was first published in 1996 under the title “Shipping Out.” Since then, many admirable writers have widened and diversified the genre. Usually the essayist commissioned to take to the sea is in their first or second flush of youth and is ready to sharpen their wit against the hull of the offending vessel. I am 51, old and tired, having seen much of the world as a former travel journalist, and mostly what I do in both life and prose is shrug while muttering to my imaginary dachshund, “This too shall pass.” But the Icon of the Seas will not countenance a shrug. The Icon of the Seas is the Linda Loman of cruise ships, exclaiming that attention must be paid. And here I am in late January with my one piece of luggage and useless gray winter jacket and passport, zipping through the Port of Miami en route to the gangway that will separate me from the bulk of North America for more than seven days, ready to pay it in full.

The aforementioned gangway opens up directly onto a thriving mall (I will soon learn it is imperiously called the “Royal Promenade”), presently filled with yapping passengers beneath a ceiling studded with balloons ready to drop. Crew members from every part of the global South, as well as a few Balkans, are shepherding us along while pressing flutes of champagne into our hands. By a humming Starbucks, I drink as many of these as I can and prepare to find my cabin. I show my blue Suite Sky SeaPass Card (more on this later, much more) to a smiling woman from the Philippines, and she tells me to go “aft.” Which is where, now? As someone who has rarely sailed on a vessel grander than the Staten Island Ferry, I am confused. It turns out that the aft is the stern of the ship, or, for those of us who don’t know what a stern or an aft are, its ass. The nose of the ship, responsible for separating the waves before it, is also called a bow, and is marked for passengers as the FWD , or forward. The part of the contemporary sailing vessel where the malls are clustered is called the midship. I trust that you have enjoyed this nautical lesson.

I ascend via elevator to my suite on Deck 11. This is where I encounter my first terrible surprise. My suite windows and balcony do not face the ocean. Instead, they look out onto another shopping mall. This mall is the one that’s called Central Park, perhaps in homage to the Olmsted-designed bit of greenery in the middle of my hometown. Although on land I would be delighted to own a suite with Central Park views, here I am deeply depressed. To sail on a ship and not wake up to a vast blue carpet of ocean? Unthinkable.

Allow me a brief preamble here. The story you are reading was commissioned at a moment when most staterooms on the Icon were sold out. In fact, so enthralled by the prospect of this voyage were hard-core mariners that the ship’s entire inventory of guest rooms (the Icon can accommodate up to 7,600 passengers, but its inaugural journey was reduced to 5,000 or so for a less crowded experience) was almost immediately sold out. Hence, this publication was faced with the shocking prospect of paying nearly $19,000 to procure for this solitary passenger an entire suite—not including drinking expenses—all for the privilege of bringing you this article. But the suite in question doesn’t even have a view of the ocean! I sit down hard on my soft bed. Nineteen thousand dollars for this .

selfie photo of man with glasses, in background is swim-up bar with two women facing away

The viewless suite does have its pluses. In addition to all the Malin+Goetz products in my dual bathrooms, I am granted use of a dedicated Suite Deck lounge; access to Coastal Kitchen, a superior restaurant for Suites passengers; complimentary VOOM SM Surf & Stream (“the fastest Internet at Sea”) “for one device per person for the whole cruise duration”; a pair of bathrobes (one of which comes prestained with what looks like a large expectoration by the greenest lizard on Earth); and use of the Grove Suite Sun, an area on Decks 18 and 19 with food and deck chairs reserved exclusively for Suite passengers. I also get reserved seating for a performance of The Wizard of Oz , an ice-skating tribute to the periodic table, and similar provocations. The very color of my Suite Sky SeaPass Card, an oceanic blue as opposed to the cloying royal purple of the standard non-Suite passenger, will soon provoke envy and admiration. But as high as my status may be, there are those on board who have much higher status still, and I will soon learn to bow before them.

In preparation for sailing, I have “priced in,” as they say on Wall Street, the possibility that I may come from a somewhat different monde than many of the other cruisers. Without falling into stereotypes or preconceptions, I prepare myself for a friendly outspokenness on the part of my fellow seafarers that may not comply with modern DEI standards. I believe in meeting people halfway, and so the day before flying down to Miami, I visited what remains of Little Italy to purchase a popular T-shirt that reads DADDY’S LITTLE MEATBALL across the breast in the colors of the Italian flag. My wife recommended that I bring one of my many T-shirts featuring Snoopy and the Peanuts gang, as all Americans love the beagle and his friends. But I naively thought that my meatball T-shirt would be more suitable for conversation-starting. “Oh, and who is your ‘daddy’?” some might ask upon seeing it. “And how long have you been his ‘little meatball’?” And so on.

I put on my meatball T-shirt and head for one of the dining rooms to get a late lunch. In the elevator, I stick out my chest for all to read the funny legend upon it, but soon I realize that despite its burnished tricolor letters, no one takes note. More to the point, no one takes note of me. Despite my attempts at bridge building, the very sight of me (small, ethnic, without a cap bearing the name of a football team) elicits no reaction from other passengers. Most often, they will small-talk over me as if I don’t exist. This brings to mind the travails of David Foster Wallace , who felt so ostracized by his fellow passengers that he retreated to his cabin for much of his voyage. And Wallace was raised primarily in the Midwest and was a much larger, more American-looking meatball than I am. If he couldn’t talk to these people, how will I? What if I leave this ship without making any friends at all, despite my T-shirt? I am a social creature, and the prospect of seven days alone and apart is saddening. Wallace’s stateroom, at least, had a view of the ocean, a kind of cheap eternity.

Worse awaits me in the dining room. This is a large, multichandeliered room where I attended my safety training (I was shown how to put on a flotation vest; it is a very simple procedure). But the maître d’ politely refuses me entry in an English that seems to verge on another language. “I’m sorry, this is only for pendejos ,” he seems to be saying. I push back politely and he repeats himself. Pendejos ? Piranhas? There’s some kind of P-word to which I am not attuned. Meanwhile elderly passengers stream right past, powered by their limbs, walkers, and electric wheelchairs. “It is only pendejo dining today, sir.” “But I have a suite!” I say, already starting to catch on to the ship’s class system. He examines my card again. “But you are not a pendejo ,” he confirms. I am wearing a DADDY’S LITTLE MEATBALL T-shirt, I want to say to him. I am the essence of pendejo .

Eventually, I give up and head to the plebeian buffet on Deck 15, which has an aquatic-styled name I have now forgotten. Before gaining entry to this endless cornucopia of reheated food, one passes a washing station of many sinks and soap dispensers, and perhaps the most intriguing character on the entire ship. He is Mr. Washy Washy—or, according to his name tag, Nielbert of the Philippines—and he is dressed as a taco (on other occasions, I’ll see him dressed as a burger). Mr. Washy Washy performs an eponymous song in spirited, indeed flamboyant English: “Washy, washy, wash your hands, WASHY WASHY!” The dangers of norovirus and COVID on a cruise ship this size (a giant fellow ship was stricken with the former right after my voyage) makes Mr. Washy Washy an essential member of the crew. The problem lies with the food at the end of Washy’s rainbow. The buffet is groaning with what sounds like sophisticated dishes—marinated octopus, boiled egg with anchovy, chorizo, lobster claws—but every animal tastes tragically the same, as if there was only one creature available at the market, a “cruisipus” bred specifically for Royal Caribbean dining. The “vegetables” are no better. I pick up a tomato slice and look right through it. It tastes like cellophane. I sit alone, apart from the couples and parents with gaggles of children, as “We Are Family” echoes across the buffet space.

I may have failed to mention that all this time, the Icon of the Seas has not left port. As the fiery mango of the subtropical setting sun makes Miami’s condo skyline even more apocalyptic, the ship shoves off beneath a perfunctory display of fireworks. After the sun sets, in the far, dark distance, another circus-lit cruise ship ruptures the waves before us. We glance at it with pity, because it is by definition a smaller ship than our own. I am on Deck 15, outside the buffet and overlooking a bunch of pools (the Icon has seven of them), drinking a frilly drink that I got from one of the bars (the Icon has 15 of them), still too shy to speak to anyone, despite Sister Sledge’s assertion that all on the ship are somehow related.

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The ship’s passage away from Ron DeSantis’s Florida provides no frisson, no sense of developing “sea legs,” as the ship is too large to register the presence of waves unless a mighty wind adds significant chop. It is time for me to register the presence of the 5,000 passengers around me, even if they refuse to register mine. My fellow travelers have prepared for this trip with personally decorated T-shirts celebrating the importance of this voyage. The simplest ones say ICON INAUGURAL ’24 on the back and the family name on the front. Others attest to an over-the-top love of cruise ships: WARNING! MAY START TALKING ABOUT CRUISING . Still others are artisanally designed and celebrate lifetimes spent married while cruising (on ships, of course). A couple possibly in their 90s are wearing shirts whose backs feature a drawing of a cruise liner, two flamingos with ostensibly male and female characteristics, and the legend “ HUSBAND AND WIFE Cruising Partners FOR LIFE WE MAY NOT HAVE IT All Together BUT TOGETHER WE HAVE IT ALL .” (The words not in all caps have been written in cursive.) A real journalist or a more intrepid conversationalist would have gone up to the couple and asked them to explain the longevity of their marriage vis-à-vis their love of cruising. But instead I head to my mall suite, take off my meatball T-shirt, and allow the first tears of the cruise to roll down my cheeks slowly enough that I briefly fall asleep amid the moisture and salt.

photo of elaborate twisting multicolored waterslides with long stairwell to platform

I WAKE UP with a hangover. Oh God. Right. I cannot believe all of that happened last night. A name floats into my cobwebbed, nauseated brain: “Ayn Rand.” Jesus Christ.

I breakfast alone at the Coastal Kitchen. The coffee tastes fine and the eggs came out of a bird. The ship rolls slightly this morning; I can feel it in my thighs and my schlong, the parts of me that are most receptive to danger.

I had a dangerous conversation last night. After the sun set and we were at least 50 miles from shore (most modern cruise ships sail at about 23 miles an hour), I lay in bed softly hiccupping, my arms stretched out exactly like Jesus on the cross, the sound of the distant waves missing from my mall-facing suite, replaced by the hum of air-conditioning and children shouting in Spanish through the vents of my two bathrooms. I decided this passivity was unacceptable. As an immigrant, I feel duty-bound to complete the tasks I am paid for, which means reaching out and trying to understand my fellow cruisers. So I put on a normal James Perse T-shirt and headed for one of the bars on the Royal Promenade—the Schooner Bar, it was called, if memory serves correctly.

I sat at the bar for a martini and two Negronis. An old man with thick, hairy forearms drank next to me, very silent and Hemingwaylike, while a dreadlocked piano player tinkled out a series of excellent Elton John covers. To my right, a young white couple—he in floral shorts, she in a light, summery miniskirt with a fearsome diamond ring, neither of them in football regalia—chatted with an elderly couple. Do it , I commanded myself. Open your mouth. Speak! Speak without being spoken to. Initiate. A sentence fragment caught my ear from the young woman, “Cherry Hill.” This is a suburb of Philadelphia in New Jersey, and I had once been there for a reading at a synagogue. “Excuse me,” I said gently to her. “Did you just mention Cherry Hill? It’s a lovely place.”

As it turned out, the couple now lived in Fort Lauderdale (the number of Floridians on the cruise surprised me, given that Southern Florida is itself a kind of cruise ship, albeit one slowly sinking), but soon they were talking with me exclusively—the man potbellied, with a chin like a hard-boiled egg; the woman as svelte as if she were one of the many Ukrainian members of the crew—the elderly couple next to them forgotten. This felt as groundbreaking as the first time I dared to address an American in his native tongue, as a child on a bus in Queens (“On my foot you are standing, Mister”).

“I don’t want to talk politics,” the man said. “But they’re going to eighty-six Biden and put Michelle in.”

I considered the contradictions of his opening conversational gambit, but decided to play along. “People like Michelle,” I said, testing the waters. The husband sneered, but the wife charitably put forward that the former first lady was “more personable” than Joe Biden. “They’re gonna eighty-six Biden,” the husband repeated. “He can’t put a sentence together.”

After I mentioned that I was a writer—though I presented myself as a writer of teleplays instead of novels and articles such as this one—the husband told me his favorite writer was Ayn Rand. “Ayn Rand, she came here with nothing,” the husband said. “I work with a lot of Cubans, so …” I wondered if I should mention what I usually do to ingratiate myself with Republicans or libertarians: the fact that my finances improved after pass-through corporations were taxed differently under Donald Trump. Instead, I ordered another drink and the couple did the same, and I told him that Rand and I were born in the same city, St. Petersburg/Leningrad, and that my family also came here with nothing. Now the bonding and drinking began in earnest, and several more rounds appeared. Until it all fell apart.

Read: Gary Shteyngart on watching Russian television for five days straight

My new friend, whom I will refer to as Ayn, called out to a buddy of his across the bar, and suddenly a young couple, both covered in tattoos, appeared next to us. “He fucking punked me,” Ayn’s frat-boy-like friend called out as he put his arm around Ayn, while his sizable partner sizzled up to Mrs. Rand. Both of them had a look I have never seen on land—their eyes projecting absence and enmity in equal measure. In the ’90s, I drank with Russian soldiers fresh from Chechnya and wandered the streets of wartime Zagreb, but I have never seen such undisguised hostility toward both me and perhaps the universe at large. I was briefly introduced to this psychopathic pair, but neither of them wanted to have anything to do with me, and the tattooed woman would not even reveal her Christian name to me (she pretended to have the same first name as Mrs. Rand). To impress his tattooed friends, Ayn made fun of the fact that as a television writer, I’d worked on the series Succession (which, it would turn out, practically nobody on the ship had watched), instead of the far more palatable, in his eyes, zombie drama of last year. And then my new friends drifted away from me into an angry private conversation—“He punked me!”—as I ordered another drink for myself, scared of the dead-eyed arrivals whose gaze never registered in the dim wattage of the Schooner Bar, whose terrifying voices and hollow laughs grated like unoiled gears against the crooning of “Goodbye Yellow Brick Road.”

But today is a new day for me and my hangover. After breakfast, I explore the ship’s so-called neighborhoods . There’s the AquaDome, where one can find a food hall and an acrobatic sound-and-light aquatic show. Central Park has a premium steak house, a sushi joint, and a used Rolex that can be bought for $8,000 on land here proudly offered at $17,000. There’s the aforementioned Royal Promenade, where I had drunk with the Rands, and where a pair of dueling pianos duel well into the night. There’s Surfside, a kids’ neighborhood full of sugary garbage, which looks out onto the frothy trail that the behemoth leaves behind itself. Thrill Island refers to the collection of tubes that clutter the ass of the ship and offer passengers six waterslides and a surfing simulation. There’s the Hideaway, an adult zone that plays music from a vomit-slathered, Brit-filled Alicante nightclub circa 1996 and proves a big favorite with groups of young Latin American customers. And, most hurtfully, there’s the Suite Neighborhood.

2 photos: a ship's foamy white wake stretches to the horizon; a man at reailing with water and two large ships docked behind

I say hurtfully because as a Suite passenger I should be here, though my particular suite is far from the others. Whereas I am stuck amid the riffraff of Deck 11, this section is on the highborn Decks 16 and 17, and in passing, I peek into the spacious, tall-ceilinged staterooms from the hallway, dazzled by the glint of the waves and sun. For $75,000, one multifloor suite even comes with its own slide between floors, so that a family may enjoy this particular terror in private. There is a quiet splendor to the Suite Neighborhood. I see fewer stickers and signs and drawings than in my own neighborhood—for example, MIKE AND DIANA PROUDLY SERVED U.S. MARINE CORPS RETIRED . No one here needs to announce their branch of service or rank; they are simply Suites, and this is where they belong. Once again, despite my hard work and perseverance, I have been disallowed from the true American elite. Once again, I am “Not our class, dear.” I am reminded of watching The Love Boat on my grandmother’s Zenith, which either was given to her or we found in the trash (I get our many malfunctioning Zeniths confused) and whose tube got so hot, I would put little chunks of government cheese on a thin tissue atop it to give our welfare treat a pleasant, Reagan-era gooeyness. I could not understand English well enough then to catch the nuances of that seafaring program, but I knew that there were differences in the status of the passengers, and that sometimes those differences made them sad. Still, this ship, this plenty—every few steps, there are complimentary nachos or milkshakes or gyros on offer—was the fatty fuel of my childhood dreams. If only I had remained a child.

I walk around the outdoor decks looking for company. There is a middle-aged African American couple who always seem to be asleep in each other’s arms, probably exhausted from the late capitalism they regularly encounter on land. There is far more diversity on this ship than I expected. Many couples are a testament to Loving v. Virginia , and there is a large group of folks whose T-shirts read MELANIN AT SEA / IT’S THE MELANIN FOR ME . I smile when I see them, but then some young kids from the group makes Mr. Washy Washy do a cruel, caricatured “Burger Dance” (today he is in his burger getup), and I think, Well, so much for intersectionality .

At the infinity pool on Deck 17, I spot some elderly women who could be ethnic and from my part of the world, and so I jump in. I am proved correct! Many of them seem to be originally from Queens (“Corona was still great when it was all Italian”), though they are now spread across the tristate area. We bond over the way “Ron-kon-koma” sounds when announced in Penn Station.

“Everyone is here for a different reason,” one of them tells me. She and her ex-husband last sailed together four years ago to prove to themselves that their marriage was truly over. Her 15-year-old son lost his virginity to “an Irish young lady” while their ship was moored in Ravenna, Italy. The gaggle of old-timers competes to tell me their favorite cruising stories and tips. “A guy proposed in Central Park a couple of years ago”—many Royal Caribbean ships apparently have this ridiculous communal area—“and she ran away screaming!” “If you’re diamond-class, you get four drinks for free.” “A different kind of passenger sails out of Bayonne.” (This, perhaps, is racially coded.) “Sometimes, if you tip the bartender $5, your next drink will be free.”

“Everyone’s here for a different reason,” the woman whose marriage ended on a cruise tells me again. “Some people are here for bad reasons—the drinkers and the gamblers. Some people are here for medical reasons.” I have seen more than a few oxygen tanks and at least one woman clearly undergoing very serious chemo. Some T-shirts celebrate good news about a cancer diagnosis. This might be someone’s last cruise or week on Earth. For these women, who have spent months, if not years, at sea, cruising is a ritual as well as a life cycle: first love, last love, marriage, divorce, death.

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I have talked with these women for so long, tonight I promise myself that after a sad solitary dinner I will not try to seek out company at the bars in the mall or the adult-themed Hideaway. I have enough material to fulfill my duties to this publication. As I approach my orphaned suite, I run into the aggro young people who stole Mr. and Mrs. Rand away from me the night before. The tattooed apparitions pass me without a glance. She is singing something violent about “Stuttering Stanley” (a character in a popular horror movie, as I discover with my complimentary VOOM SM Surf & Stream Internet at Sea) and he’s loudly shouting about “all the money I’ve lost,” presumably at the casino in the bowels of the ship.

So these bent psychos out of a Cormac McCarthy novel are angrily inhabiting my deck. As I mewl myself to sleep, I envision a limited series for HBO or some other streamer, a kind of low-rent White Lotus , where several aggressive couples conspire to throw a shy intellectual interloper overboard. I type the scenario into my phone. As I fall asleep, I think of what the woman who recently divorced her husband and whose son became a man through the good offices of the Irish Republic told me while I was hoisting myself out of the infinity pool. “I’m here because I’m an explorer. I’m here because I’m trying something new.” What if I allowed myself to believe in her fantasy?

2 photos: 2 slices of pizza on plate; man in "Daddy's Little Meatball" shirt and shorts standing in outdoor dining area with ship's exhaust stacks in background

“YOU REALLY STARTED AT THE TOP,” they tell me. I’m at the Coastal Kitchen for my eggs and corned-beef hash, and the maître d’ has slotted me in between two couples. Fueled by coffee or perhaps intrigued by my relative youth, they strike up a conversation with me. As always, people are shocked that this is my first cruise. They contrast the Icon favorably with all the preceding liners in the Royal Caribbean fleet, usually commenting on the efficiency of the elevators that hurl us from deck to deck (as in many large corporate buildings, the elevators ask you to choose a floor and then direct you to one of many lifts). The couple to my right, from Palo Alto—he refers to his “porn mustache” and calls his wife “my cougar” because she is two years older—tell me they are “Pandemic Pinnacles.”

This is the day that my eyes will be opened. Pinnacles , it is explained to me over translucent cantaloupe, have sailed with Royal Caribbean for 700 ungodly nights. Pandemic Pinnacles took advantage of the two-for-one accrual rate of Pinnacle points during the pandemic, when sailing on a cruise ship was even more ill-advised, to catapult themselves into Pinnacle status.

Because of the importance of the inaugural voyage of the world’s largest cruise liner, more than 200 Pinnacles are on this ship, a startling number, it seems. Mrs. Palo Alto takes out a golden badge that I have seen affixed over many a breast, which reads CROWN AND ANCHOR SOCIETY along with her name. This is the coveted badge of the Pinnacle. “You should hear all the whining in Guest Services,” her husband tells me. Apparently, the Pinnacles who are not also Suites like us are all trying to use their status to get into Coastal Kitchen, our elite restaurant. Even a Pinnacle needs to be a Suite to access this level of corned-beef hash.

“We’re just baby Pinnacles,” Mrs. Palo Alto tells me, describing a kind of internal class struggle among the Pinnacle elite for ever higher status.

And now I understand what the maître d’ was saying to me on the first day of my cruise. He wasn’t saying “ pendejo .” He was saying “Pinnacle.” The dining room was for Pinnacles only, all those older people rolling in like the tide on their motorized scooters.

And now I understand something else: This whole thing is a cult. And like most cults, it can’t help but mirror the endless American fight for status. Like Keith Raniere’s NXIVM, where different-colored sashes were given out to connote rank among Raniere’s branded acolytes, this is an endless competition among Pinnacles, Suites, Diamond-Plusers, and facing-the-mall, no-balcony purple SeaPass Card peasants, not to mention the many distinctions within each category. The more you cruise, the higher your status. No wonder a section of the Royal Promenade is devoted to getting passengers to book their next cruise during the one they should be enjoying now. No wonder desperate Royal Caribbean offers (“FINAL HOURS”) crowded my email account weeks before I set sail. No wonder the ship’s jewelry store, the Royal Bling, is selling a $100,000 golden chalice that will entitle its owner to drink free on Royal Caribbean cruises for life. (One passenger was already gaming out whether her 28-year-old son was young enough to “just about earn out” on the chalice or if that ship had sailed.) No wonder this ship was sold out months before departure , and we had to pay $19,000 for a horrid suite away from the Suite Neighborhood. No wonder the most mythical hero of Royal Caribbean lore is someone named Super Mario, who has cruised so often, he now has his own working desk on many ships. This whole experience is part cult, part nautical pyramid scheme.

From the June 2014 issue: Ship of wonks

“The toilets are amazing,” the Palo Altos are telling me. “One flush and you’re done.” “They don’t understand how energy-efficient these ships are,” the husband of the other couple is telling me. “They got the LNG”—liquefied natural gas, which is supposed to make the Icon a boon to the environment (a concept widely disputed and sometimes ridiculed by environmentalists).

But I’m thinking along a different line of attack as I spear my last pallid slice of melon. For my streaming limited series, a Pinnacle would have to get killed by either an outright peasant or a Suite without an ocean view. I tell my breakfast companions my idea.

“Oh, for sure a Pinnacle would have to be killed,” Mr. Palo Alto, the Pandemic Pinnacle, says, touching his porn mustache thoughtfully as his wife nods.

“THAT’S RIGHT, IT’S your time, buddy!” Hubert, my fun-loving Panamanian cabin attendant, shouts as I step out of my suite in a robe. “Take it easy, buddy!”

I have come up with a new dressing strategy. Instead of trying to impress with my choice of T-shirts, I have decided to start wearing a robe, as one does at a resort property on land, with a proper spa and hammam. The response among my fellow cruisers has been ecstatic. “Look at you in the robe!” Mr. Rand cries out as we pass each other by the Thrill Island aqua park. “You’re living the cruise life! You know, you really drank me under the table that night.” I laugh as we part ways, but my soul cries out, Please spend more time with me, Mr. and Mrs. Rand; I so need the company .

In my white robe, I am a stately presence, a refugee from a better limited series, a one-man crossover episode. (Only Suites are granted these robes to begin with.) Today, I will try many of the activities these ships have on offer to provide their clientele with a sense of never-ceasing motion. Because I am already at Thrill Island, I decide to climb the staircase to what looks like a mast on an old-fashioned ship (terrified, because I am afraid of heights) to try a ride called “Storm Chasers,” which is part of the “Category 6” water park, named in honor of one of the storms that may someday do away with the Port of Miami entirely. Storm Chasers consists of falling from the “mast” down a long, twisting neon tube filled with water, like being the camera inside your own colonoscopy, as you hold on to the handles of a mat, hoping not to die. The tube then flops you down headfirst into a trough of water, a Royal Caribbean baptism. It both knocks my breath out and makes me sad.

In keeping with the aquatic theme, I attend a show at the AquaDome. To the sound of “Live and Let Die,” a man in a harness gyrates to and fro in the sultry air. I saw something very similar in the back rooms of the famed Berghain club in early-aughts Berlin. Soon another harnessed man is gyrating next to the first. Ja , I think to myself, I know how this ends. Now will come the fisting , natürlich . But the show soon devolves into the usual Marvel-film-grade nonsense, with too much light and sound signifying nichts . If any fisting is happening, it is probably in the Suite Neighborhood, inside a cabin marked with an upside-down pineapple, which I understand means a couple are ready to swing, and I will see none of it.

I go to the ice show, which is a kind of homage—if that’s possible—to the periodic table, done with the style and pomp and masterful precision that would please the likes of Kim Jong Un, if only he could afford Royal Caribbean talent. At one point, the dancers skate to the theme song of Succession . “See that!” I want to say to my fellow Suites—at “cultural” events, we have a special section reserved for us away from the commoners—“ Succession ! It’s even better than the zombie show! Open your minds!”

Finally, I visit a comedy revue in an enormous and too brightly lit version of an “intimate,” per Royal Caribbean literature, “Manhattan comedy club.” Many of the jokes are about the cruising life. “I’ve lived on ships for 20 years,” one of the middle-aged comedians says. “I can only see so many Filipino homosexuals dressed as a taco.” He pauses while the audience laughs. “I am so fired tonight,” he says. He segues into a Trump impression and then Biden falling asleep at the microphone, which gets the most laughs. “Anyone here from Fort Leonard Wood?” another comedian asks. Half the crowd seems to cheer. As I fall asleep that night, I realize another connection I have failed to make, and one that may explain some of the diversity on this vessel—many of its passengers have served in the military.

As a coddled passenger with a suite, I feel like I am starting to understand what it means to have a rank and be constantly reminded of it. There are many espresso makers , I think as I look across the expanse of my officer-grade quarters before closing my eyes, but this one is mine .

photo of sheltered sandy beach with palms, umbrellas, and chairs with two large docked cruise ships in background

A shocking sight greets me beyond the pools of Deck 17 as I saunter over to the Coastal Kitchen for my morning intake of slightly sour Americanos. A tiny city beneath a series of perfectly pressed green mountains. Land! We have docked for a brief respite in Basseterre, the capital of St. Kitts and Nevis. I wolf down my egg scramble to be one of the first passengers off the ship. Once past the gangway, I barely refrain from kissing the ground. I rush into the sights and sounds of this scruffy island city, sampling incredible conch curry and buckets of non-Starbucks coffee. How wonderful it is to be where God intended humans to be: on land. After all, I am neither a fish nor a mall rat. This is my natural environment. Basseterre may not be Havana, but there are signs of human ingenuity and desire everywhere you look. The Black Table Grill Has been Relocated to Soho Village, Market Street, Directly Behind of, Gary’s Fruits and Flower Shop. Signed. THE PORK MAN reads a sign stuck to a wall. Now, that is how you write a sign. A real sign, not the come-ons for overpriced Rolexes that blink across the screens of the Royal Promenade.

“Hey, tie your shoestring!” a pair of laughing ladies shout to me across the street.

“Thank you!” I shout back. Shoestring! “Thank you very much.”

A man in Independence Square Park comes by and asks if I want to play with his monkey. I haven’t heard that pickup line since the Penn Station of the 1980s. But then he pulls a real monkey out of a bag. The monkey is wearing a diaper and looks insane. Wonderful , I think, just wonderful! There is so much life here. I email my editor asking if I can remain on St. Kitts and allow the Icon to sail off into the horizon without me. I have even priced a flight home at less than $300, and I have enough material from the first four days on the cruise to write the entire story. “It would be funny …” my editor replies. “Now get on the boat.”

As I slink back to the ship after my brief jailbreak, the locals stand under umbrellas to gaze at and photograph the boat that towers over their small capital city. The limousines of the prime minister and his lackeys are parked beside the gangway. St. Kitts, I’ve been told, is one of the few islands that would allow a ship of this size to dock.

“We hear about all the waterslides,” a sweet young server in one of the cafés told me. “We wish we could go on the ship, but we have to work.”

“I want to stay on your island,” I replied. “I love it here.”

But she didn’t understand how I could possibly mean that.

“WASHY, WASHY, so you don’t get stinky, stinky!” kids are singing outside the AquaDome, while their adult minders look on in disapproval, perhaps worried that Mr. Washy Washy is grooming them into a life of gayness. I heard a southern couple skip the buffet entirely out of fear of Mr. Washy Washy.

Meanwhile, I have found a new watering hole for myself, the Swim & Tonic, the biggest swim-up bar on any cruise ship in the world. Drinking next to full-size, nearly naked Americans takes away one’s own self-consciousness. The men have curvaceous mom bodies. The women are equally un-shy about their sprawling physiques.

Today I’ve befriended a bald man with many children who tells me that all of the little trinkets that Royal Caribbean has left us in our staterooms and suites are worth a fortune on eBay. “Eighty dollars for the water bottle, 60 for the lanyard,” the man says. “This is a cult.”

“Tell me about it,” I say. There is, however, a clientele for whom this cruise makes perfect sense. For a large middle-class family (he works in “supply chains”), seven days in a lower-tier cabin—which starts at $1,800 a person—allow the parents to drop off their children in Surfside, where I imagine many young Filipina crew members will take care of them, while the parents are free to get drunk at a swim-up bar and maybe even get intimate in their cabin. Cruise ships have become, for a certain kind of hardworking family, a form of subsidized child care.

There is another man I would like to befriend at the Swim & Tonic, a tall, bald fellow who is perpetually inebriated and who wears a necklace studded with little rubber duckies in sunglasses, which, I am told, is a sort of secret handshake for cruise aficionados. Tomorrow, I will spend more time with him, but first the ship docks at St. Thomas, in the U.S. Virgin Islands. Charlotte Amalie, the capital, is more charming in name than in presence, but I still all but jump off the ship to score a juicy oxtail and plantains at the well-known Petite Pump Room, overlooking the harbor. From one of the highest points in the small city, the Icon of the Seas appears bigger than the surrounding hills.

I usually tan very evenly, but something about the discombobulation of life at sea makes me forget the regular application of sunscreen. As I walk down the streets of Charlotte Amalie in my fluorescent Icon of the Seas cap, an old Rastafarian stares me down. “Redneck,” he hisses.

“No,” I want to tell him, as I bring a hand up to my red neck, “that’s not who I am at all. On my island, Mannahatta, as Whitman would have it, I am an interesting person living within an engaging artistic milieu. I do not wish to use the Caribbean as a dumping ground for the cruise-ship industry. I love the work of Derek Walcott. You don’t understand. I am not a redneck. And if I am, they did this to me.” They meaning Royal Caribbean? Its passengers? The Rands?

“They did this to me!”

Back on the Icon, some older matrons are muttering about a run-in with passengers from the Celebrity cruise ship docked next to us, the Celebrity Apex. Although Celebrity Cruises is also owned by Royal Caribbean, I am made to understand that there is a deep fratricidal beef between passengers of the two lines. “We met a woman from the Apex,” one matron says, “and she says it was a small ship and there was nothing to do. Her face was as tight as a 19-year-old’s, she had so much surgery.” With those words, and beneath a cloudy sky, humidity shrouding our weathered faces and red necks, we set sail once again, hopefully in the direction of home.

photo from inside of spacious geodesic-style glass dome facing ocean, with stairwells and seating areas

THERE ARE BARELY 48 HOURS LEFT to the cruise, and the Icon of the Seas’ passengers are salty. They know how to work the elevators. They know the Washy Washy song by heart. They understand that the chicken gyro at “Feta Mediterranean,” in the AquaDome Market, is the least problematic form of chicken on the ship.

The passengers have shed their INAUGURAL CRUISE T-shirts and are now starting to evince political opinions. There are caps pledging to make America great again and T-shirts that celebrate words sometimes attributed to Patrick Henry: “The Constitution is not an instrument for the government to restrain the people; it is an instrument for the people to restrain the government.” With their preponderance of FAMILY FLAG FAITH FRIENDS FIREARMS T-shirts, the tables by the crepe station sometimes resemble the Capitol Rotunda on January 6. The Real Anthony Fauci , by Robert F. Kennedy Jr., appears to be a popular form of literature, especially among young men with very complicated versions of the American flag on their T-shirts. Other opinions blend the personal and the political. “Someone needs to kill Washy guy, right?” a well-dressed man in the elevator tells me, his gray eyes radiating nothing. “Just beat him to death. Am I right?” I overhear the male member of a young couple whisper, “There goes that freak” as I saunter by in my white spa robe, and I decide to retire it for the rest of the cruise.

I visit the Royal Bling to see up close the $100,000 golden chalice that entitles you to free drinks on Royal Caribbean forever. The pleasant Serbian saleslady explains that the chalice is actually gold-plated and covered in white zirconia instead of diamonds, as it would otherwise cost $1 million. “If you already have everything,” she explains, “this is one more thing you can get.”

I believe that anyone who works for Royal Caribbean should be entitled to immediate American citizenship. They already speak English better than most of the passengers and, per the Serbian lady’s sales pitch above, better understand what America is as well. Crew members like my Panamanian cabin attendant seem to work 24 hours a day. A waiter from New Delhi tells me that his contract is six months and three weeks long. After a cruise ends, he says, “in a few hours, we start again for the next cruise.” At the end of the half a year at sea, he is allowed a two-to-three-month stay at home with his family. As of 2019, the median income for crew members was somewhere in the vicinity of $20,000, according to a major business publication. Royal Caribbean would not share the current median salary for its crew members, but I am certain that it amounts to a fraction of the cost of a Royal Bling gold-plated, zirconia-studded chalice.

And because most of the Icon’s hyper-sanitized spaces are just a frittata away from being a Delta lounge, one forgets that there are actual sailors on this ship, charged with the herculean task of docking it in port. “Having driven 100,000-ton aircraft carriers throughout my career,” retired Admiral James G. Stavridis, the former NATO Supreme Allied Commander Europe, writes to me, “I’m not sure I would even know where to begin with trying to control a sea monster like this one nearly three times the size.” (I first met Stavridis while touring Army bases in Germany more than a decade ago.)

Today, I decide to head to the hot tub near Swim & Tonic, where some of the ship’s drunkest reprobates seem to gather (the other tubs are filled with families and couples). The talk here, like everywhere else on the ship, concerns football, a sport about which I know nothing. It is apparent that four teams have recently competed in some kind of finals for the year, and that two of them will now face off in the championship. Often when people on the Icon speak, I will try to repeat the last thing they said with a laugh or a nod of disbelief. “Yes, 20-yard line! Ha!” “Oh my God, of course, scrimmage.”

Soon we are joined in the hot tub by the late-middle-age drunk guy with the duck necklace. He is wearing a bucket hat with the legend HAWKEYES , which, I soon gather, is yet another football team. “All right, who turned me in?” Duck Necklace says as he plops into the tub beside us. “I get a call in the morning,” he says. “It’s security. Can you come down to the dining room by 10 a.m.? You need to stay away from the members of this religious family.” Apparently, the gregarious Duck Necklace had photobombed the wrong people. There are several families who present as evangelical Christians or practicing Muslims on the ship. One man, evidently, was not happy that Duck Necklace had made contact with his relatives. “It’s because of religious stuff; he was offended. I put my arm around 20 people a day.”

Everyone laughs. “They asked me three times if I needed medication,” he says of the security people who apparently interrogated him in full view of others having breakfast.

Another hot-tub denizen suggests that he should have asked for fentanyl. After a few more drinks, Duck Necklace begins to muse about what it would be like to fall off the ship. “I’m 62 and I’m ready to go,” he says. “I just don’t want a shark to eat me. I’m a huge God guy. I’m a Bible guy. There’s some Mayan theory squaring science stuff with religion. There is so much more to life on Earth.” We all nod into our Red Stripes.

“I never get off the ship when we dock,” he says. He tells us he lost $6,000 in the casino the other day. Later, I look him up, and it appears that on land, he’s a financial adviser in a crisp gray suit, probably a pillar of his North Chicago community.

photo of author smiling and holding soft-serve ice-cream cone with outdoor seating area in background

THE OCEAN IS TEEMING with fascinating life, but on the surface it has little to teach us. The waves come and go. The horizon remains ever far away.

I am constantly told by my fellow passengers that “everybody here has a story.” Yes, I want to reply, but everybody everywhere has a story. You, the reader of this essay, have a story, and yet you’re not inclined to jump on a cruise ship and, like Duck Necklace, tell your story to others at great pitch and volume. Maybe what they’re saying is that everybody on this ship wants to have a bigger, more coherent, more interesting story than the one they’ve been given. Maybe that’s why there’s so much signage on the doors around me attesting to marriages spent on the sea. Maybe that’s why the Royal Caribbean newsletter slipped under my door tells me that “this isn’t a vacation day spent—it’s bragging rights earned.” Maybe that’s why I’m so lonely.

Today is a big day for Icon passengers. Today the ship docks at Royal Caribbean’s own Bahamian island, the Perfect Day at CocoCay. (This appears to be the actual name of the island.) A comedian at the nightclub opined on what his perfect day at CocoCay would look like—receiving oral sex while learning that his ex-wife had been killed in a car crash (big laughter). But the reality of the island is far less humorous than that.

One of the ethnic tristate ladies in the infinity pool told me that she loved CocoCay because it had exactly the same things that could be found on the ship itself. This proves to be correct. It is like the Icon, but with sand. The same tired burgers, the same colorful tubes conveying children and water from Point A to B. The same swim-up bar at its Hideaway ($140 for admittance, no children allowed; Royal Caribbean must be printing money off its clientele). “There was almost a fight at The Wizard of Oz ,” I overhear an elderly woman tell her companion on a chaise lounge. Apparently one of the passengers began recording Royal Caribbean’s intellectual property and “three guys came after him.”

I walk down a pathway to the center of the island, where a sign reads DO NOT ENTER: YOU HAVE REACHED THE BOUNDARY OF ADVENTURE . I hear an animal scampering in the bushes. A Royal Caribbean worker in an enormous golf cart soon chases me down and takes me back to the Hideaway, where I run into Mrs. Rand in a bikini. She becomes livid telling me about an altercation she had the other day with a woman over a towel and a deck chair. We Suites have special towel privileges; we do not have to hand over our SeaPass Card to score a towel. But the Rands are not Suites. “People are so entitled here,” Mrs. Rand says. “It’s like the airport with all its classes.” “You see,” I want to say, “this is where your husband’s love of Ayn Rand runs into the cruelties and arbitrary indignities of unbridled capitalism.” Instead we make plans to meet for a final drink in the Schooner Bar tonight (the Rands will stand me up).

Back on the ship, I try to do laps, but the pool (the largest on any cruise ship, naturally) is fully trashed with the detritus of American life: candy wrappers, a slowly dissolving tortilla chip, napkins. I take an extra-long shower in my suite, then walk around the perimeter of the ship on a kind of exercise track, past all the alluring lifeboats in their yellow-and-white livery. Maybe there is a dystopian angle to the HBO series that I will surely end up pitching, one with shades of WALL-E or Snowpiercer . In a collapsed world, a Royal Caribbean–like cruise liner sails from port to port, collecting new shipmates and supplies in exchange for the precious energy it has on board. (The actual Icon features a new technology that converts passengers’ poop into enough energy to power the waterslides . In the series, this shitty technology would be greatly expanded.) A very young woman (18? 19?), smart and lonely, who has only known life on the ship, walks along the same track as I do now, contemplating jumping off into the surf left by its wake. I picture reusing Duck Necklace’s words in the opening shot of the pilot. The girl is walking around the track, her eyes on the horizon; maybe she’s highborn—a Suite—and we hear the voice-over: “I’m 19 and I’m ready to go. I just don’t want a shark to eat me.”

Before the cruise is finished, I talk to Mr. Washy Washy, or Nielbert of the Philippines. He is a sweet, gentle man, and I thank him for the earworm of a song he has given me and for keeping us safe from the dreaded norovirus. “This is very important to me, getting people to wash their hands,” he tells me in his burger getup. He has dreams, as an artist and a performer, but they are limited in scope. One day he wants to dress up as a piece of bacon for the morning shift.

THE MAIDEN VOYAGE OF THE TITANIC (the Icon of the Seas is five times as large as that doomed vessel) at least offered its passengers an exciting ending to their cruise, but when I wake up on the eighth day, all I see are the gray ghosts that populate Miami’s condo skyline. Throughout my voyage, my writer friends wrote in to commiserate with me. Sloane Crosley, who once covered a three-day spa mini-cruise for Vogue , tells me she felt “so very alone … I found it very untethering.” Gideon Lewis-Kraus writes in an Instagram comment: “When Gary is done I think it’s time this genre was taken out back and shot.” And he is right. To badly paraphrase Adorno: After this, no more cruise stories. It is unfair to put a thinking person on a cruise ship. Writers typically have difficult childhoods, and it is cruel to remind them of the inherent loneliness that drove them to writing in the first place. It is also unseemly to write about the kind of people who go on cruises. Our country does not provide the education and upbringing that allow its citizens an interior life. For the creative class to point fingers at the large, breasty gentlemen adrift in tortilla-chip-laden pools of water is to gather a sour harvest of low-hanging fruit.

A day or two before I got off the ship, I decided to make use of my balcony, which I had avoided because I thought the view would only depress me further. What I found shocked me. My suite did not look out on Central Park after all. This entire time, I had been living in the ship’s Disneyland, Surfside, the neighborhood full of screaming toddlers consuming milkshakes and candy. And as I leaned out over my balcony, I beheld a slight vista of the sea and surf that I thought I had been missing. It had been there all along. The sea was frothy and infinite and blue-green beneath the span of a seagull’s wing. And though it had been trod hard by the world’s largest cruise ship, it remained.

This article appears in the May 2024 print edition with the headline “A Meatball at Sea.” When you buy a book using a link on this page, we receive a commission. Thank you for supporting The Atlantic.

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An assignment of benefits (AOB) can streamline the insurance process
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What is an Assignment of Benefits? In the context of insured property claims, an assignment of benefits (AOB) is an agreement between you and a contractor in which you give the contractor your right to insurance payments for a specific scope of work.In exchange, the contractor agrees that it will not seek payment from you for that scope of work, except for the amount of any applicable deductible.
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There are many reasons why an insurance company may not accept an assignment of benefits. To speak with a Schwartzapfel Lawyers expert about this directly, call 1-516-342-2200 for a free consultation today. It will be our privilege to assist you with all your legal questions, needs, and recovery efforts.
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An assignment of benefits (or AOB for short) is an agreement that gives your claims benefits, and in some instances complete control of your claim, to someone else. It's usually used so that a contractor can "stand in your shoes" and file a claim, make decisions about repairs, and collect insurance payments from your insurance company ...
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An overview of the legal principles that apply when assigning an insurance policy or the right to receive the insurance monies due under the policy to a third party. It considers the requirements that must be met for the assignment to be valid and explains the difference between assignment, co-insurance, noting of interest and loss payee clauses.
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