assignment of benefits georgia

The Georgia Guide to Property Insurance Claims: Deadlines, Laws, and FAQs

Like most states, Georgia has an expansive list of laws, rules, and deadlines that are applicable to homeowner’s and commercial property insurance claims.  To make it easier to understand how these laws apply to property owners and the professionals who support them, we break down what you need to know to get your Georgia claim filed right, moving fast, and paid fully.

Prove Your Loss

Get your check, georgia property claim faqs.

Homeowners, businesses, and professionals will encounter all kinds of paperwork, process, and claims-related questions when confronted with the possibility of filing an insurance claim in Georgia.  Here are some of the common questions you may encounter, with answers written by experts, like experienced attorneys, adjusters, and other insurance professionals.

Making Your Claim -- Frequently Asked Questions

The first step in your property insurance claim is to notify your insurer about your losses. Not only is doing this the only way to get your claim moving, it’s one of your duties of a loss under your insurance policy.

Is there a statutory deadline in Georgia to file a property insurance claim?

No, but you should still notify your insurance company about a loss promptly or immediately after it occurs .

Some states,  like Florida , have laws that set specific deadlines for filing property insurance claims (for example, one year from the date of loss).  Georgia is not one of those states, so the deadline in Georgia to notify your insurer about a loss is determined by your insurance policy, not state law. This first notice of loss typically starts the claim process, so very often notifying your insurance company about a loss is the same thing as “filing a claim.”

For fire claims in Georgia, your insurance policy probably requires you to give your insurance company “immediate written notice” of the loss. See Georgia’s standard fire policy .  For types of losses other than fire, your policy may require “immediate” or “prompt” written notice of the loss. What counts as “immediate” or “prompt” depends on the specific circumstances of your claim.

Regardless of these requirements , it’s in your best interest to file a claim as soon as possible (more on that below).

When should I file a property insurance claim in Georgia?

As soon as possible .

Regardless of when your policy requires you to notify your insurer about a loss, it’s in your best interest to give that notice and file a claim as soon as you can.

More specifically, unless you’re confident that the cost of your losses will be less than your deductible, you should immediately notify your insurance company about your loss .  The longer you wait to file your claim, the longer it will take to resolve your claim.  Waiting too long to file your claim could also degrade or compromise important evidence about your claim.

Besides giving notice, what else do I have to do for my insurance claim in Georgia?

You have specific duties after a loss, and in Georgia (like elsewhere) you can find the list of those duties in your insurance policy .  It’s essential that you comply with these duties, so follow each of them to a T.  The exact language used to describe these duties varies from policy to policy.

For an *example* of what you might see in your policy, here are the duties after a loss stated in a State Farm homeowner’s insurance policy for a Georgia property:

“ Your Duties After Loss . After a loss to which this insurance may apply, you must cooperate with us in the investigation of the claim and also see that the following duties are performed: a. give immediate notice to us or our agent … b. protect the property from further damage or loss … c. prepare an inventory of damaged or stolen personal property: (1) showing in detail the quantity, description, age, replacement cost, and amount of loss; and (2) attaching all bills, receipts, and related documents that substantiate the figures in the inventory ; d. as often as we reasonably require: (1) exhibit the damaged property; (2) provide us with any requested records and documents and allow us to make copies; (3) while not in the presence of any other insured: (a) give statements; and (b) submit to examinations under oath ; and (4) produce employees, members of the insured’s household, or others for examination under oath to the extent it is within the insured’s power to do so; and e. submit to us, within 60 days after the loss, your signed, sworn proof of loss that forth, to the best of your knowledge and belief: (1) the time and cause of loss; (2) interest of the insured and all others in the property involved and all encumbrances on the property; (3) other insurance that may cover the loss; (4) changes in title or occupancy of the property during the term of this policy; (5) specifications of any damaged structure and detailed estimate for repair of the damage; (6) an inventory of damaged or stolen personal property, described in 2.c; (7) receipts for additional living expenses incurred and records supporting the fair rental value loss; and (8) evidence or affidavit supporting a claim under SECTION I – ADDITIONAL COVERAGES, Credit Card, Bank Fund Transfer Card, Forgery, and Counterfeit Money coverage, stating the amount and cause of loss.”

From Raymond v. State Farm Fire & Cas. Co. , 614 F. Supp. 3d 1303, 1308 (N.D. Ga. 2022).

Proving Your Loss - Frequently Asked Questions

After you’ve notified your insurance company and started your claim, you need to prove your losses to your insurance company. Proving that your property suffered losses and that those losses are covered under your insurance policy is at the heart of an insurance claim. As a result, it’s also the most difficult stage in the claims process and where policyholders most often make mistakes. Fortunately, Georgia laws do provide you with basic protections at this stage under the Georgia Insurance Code. Read more to understand how.

When is the deadline in Georgia to file a Proof of Loss?

It depends on the terms of your policy, but usually within sixty (60) days of the loss.  For fire losses, Georgia usually law requires you to send your insurer a proof of loss within sixty (60) days of the loss, unless your insurance company extends this deadline in writing.

For types of loss other than fire, Georgia law doesn’t impose any specific deadline on policyholders to file a proof of loss.  But your policy probably does.  When reviewing your policy to determine your deadline for submitting a proof of loss, consider these four questions:

Does the policy set a deadline to submit my proof of loss? (It usually does.)

If my policy does set a deadline, does the deadline automatically apply for all claims, or does it apply only if my insurance company specifically requests that I submit a proof of loss?

If my policy does set a deadline, how long is the deadline? (It’s usually 60 days, but sometimes it is 30 or 90 days)

If my policy does set a deadline, when is the start date for the deadline — the date of loss or the date when my insurance company requests me to submit a proof of loss?

Once you’ve answered these questions, you should have a much better understanding of your deadline to submit a proof of loss.

Rules and Regulations of the State of Georgia 120-2-19  (for fire losses only)

What is a “Proof of Loss?”

You will hear the term “Proof of Loss” a lot, and see it in your insurance policy. Do not be intimidated! This simply means that you must satisfactorily demonstrate to the insurance company that you sustained the loss you sustained, and the value of that loss.

There are some best practices for this — which includes filling out a “proof of loss form” and getting it notarized. This form and the act of notarizing it enables you to explain your losses “under oath,” which elevates your proof to the insurance company.

A proof of loss is a powerful tool for moving claims forward, but it’s not always necessary in Georgia.  In other words, while you should prepare a robust Proof of Loss document, the requirement can be quite thin in the long run. In some instances, that is as simple as allowing a claims adjuster or other agent from the insurance company on your property.

Does Georgia permit an assignment of benefits (AOB) for my claim?

If you were to look just at Georgia statutes, you would find Georgia Code § 33-24-17 , which states, “A policy may be assignable or not assignable, as provided by its terms.”  In other words, under this statute, if your policy allows assignment, you can do it, and if it doesn’t allow assignment, you can’t do it.

But more than a hundred years ago, the Georgia supreme court held that an insurance policy cannot prevent a policyholder from assigning post-loss benefits , and any terms in a policy attempting to do so are null and void.  See Santiago v. Safeway Ins. Co. , 196 Ga. App. 480 (1990) ( citing Georgia Co-Op. Fire Assn. v. Borchardt & Co. , 123 Ga. 181, 183-184 (1905)).  (For a very long time, Florida had the same rule, but recently the Florida legislature overturned it , and effectively banned AOBs for policies issued after 2022 .)  So for now, you’re free to enter an AOB in Georgia if that’s what you want to do .

New to AOBs?  No problem.  Check out our handy primer on assignments of benefits . It explains what they are, what they do, and offers pros and cons depending on your situation.

If I need help proving my losses in Georgia, can I hire a public adjuster?

Public adjusters are licensed insurance adjusters who work for policyholders instead of insurance companies.  Not all claims need a public adjuster.  But if your loss is complex or your claim has gone sideways, you might want to consider whether a public adjuster — or PA– would help.  PAs do cost money, usually a percentage of the insurance payments they recover for you.  And as you would for any other professional, it’s *essential* to do your homework before hiring a PA.  You should start by confirming with the Georgia Insurance Commission’s website that the PA is properly licensed.  But don’t stop there — read reviews and talk with references before signing a contract.

For a closer look at public adjusting in Georgia, check out our Georgia Guide to Public Adjusting .

Getting Your Check -- Frequently Asked Questions

Getting reimbursed for your losses — it’s the reason you pay premiums.  Here are answer to frequently asked questions as this last, critical stage in your insurance claim.

How long will it take to get paid after filing a claim?

Typically 60 days after you’ve submitted a satisfactory proof of loss to your insurer and reached an agreement on payment with your insurer.

For instance, under the form fire policy in Georgia , insurers can take up to sixty (60) days after receiving both (1) your proof of loss and (2) the value of the loss is either agreed upon between you and the insurance company or an appraisal award has been finalized.

The requirement that you reach agreement on payment or have an appraisal finalized can be frustrating.  But it’s worth noting that if you’ve submitted a rock-solid proof of loss, and the insurer denies it for more than sixty days without any good reason, the insurer’s denial might constitute bad faith under Georgia insurance law .  So 60 days is a reasonable expectation for uncontroversial claims.

What happens if insurance offers me an amount I disagree with? How does arbitration work?

In case you and your insurance company fail to agree as to the actual value or the amount of loss, then, on the written demand of either, each shall select a competent and disinterested appraiser and notify the other of the appraiser selected within twenty days of such demand. The appraisers shall select a competent and disinterested umpire; and failing for fifteen days to agree upon such umpire, then, on request of you or your insurance, such umpire shall be selected by a judge of a court of record in the state in which the property covered is located. The appraisers shall then appraise the loss, stating separately actual cash value and loss to each item; and, failing to agree, shall submit their differences, only, to the umpire. An award in writing, so itemized, of any two when filed with this Company shall determine the amount of actual cash value and loss. Each appraiser shall be paid by the party selecting him and the expenses of appraisal and umpire shall be paid by the parties equally.

What are the requirements for proving insurance bad faith in Georgia?

To prevail on a claim for insurance bad faith in Georgia, an insured must prove three basic elements :

(1) Coverage : The policy actually covers the claim at issue.

(2) 60-day Demand Notice : The insurer must fail to pay on the claim within 60 days of the insured making a final demand for payment.

(3) Bad faith : The insurer’s failure to pay was motivated by bad faith. Bad faith means a “frivolous and unfounded refusal to pay a claim.”  Bad faith is not easy to prove; an insurer will usually not be found to have acted in bad faith if it has any reasonable ground to contest the claim.

Georgia Statute § 33-4-6 ; Taylor v. Gov’t Emps. Ins. Co. , 830 S.E.2d 235, 237 (2019).  Under Georgia law, each of these requirements is “strictly construed,” Am. Reliable Ins. Co. v. Lancaster , 849 S.E.2d 697, 702 (2020), meaning that failing to fully and clearly meet any of these requirements will likely defeat a claim of bad faith.

What is the statute of limitations in Georgia to sue on an insurance claim?

In most claims, the deadline to sue for breach of an insurance contract is spelled out in the terms of your insurance policy .  Often these policies set the limitation period as low as 1 year or 2 years from when you knew or should have know about the loss.

Although the general limitation period in Georgia for breach of contract (including insurance contracts) is six years, Georgia Code § 9-3-24 , Georgia courts have held that insurance policies can shorten that period. Through these decisions, the courts have enforced limitations periods in insurance policies that are as short as one year.  See White v. State Farm , 728 S.E.2d 685 (Ga. 2012).

There are exceptions, but they’re narrow.  For instance, a court might not enforce a limitation period if it would “work a forfeiture of the policy benefit.”  This exception, however, is very fact-specific.  Another exception is fire claims, where by statute the limitation period cannot be less than two years from the date of loss. Georgia Code § 33-32-1 (a) ; White v. State Farm .  But most property claims aren’t fire claims.  So the best bet for calculating the statute of limitations is to take the limitation period in your policy at face value.

Georgia Statutes and Regulations that Impact Your Insurance Claim

Georgia has a large collection of laws applicable to the insurance claims process for homeowners. Here is a selection of relevant statutes that will help you with the process, all housed within either the Georgia Insurance Code (Title XXXIII (33) of Georgia Statutes) or the Rules & Regulations of the State of Georgia (Rule 120-2 (Rules of Commissioner of Insurance) ).

Georgia Code § 33-32-1 — Standard fire policy.

(a) No policy of fire insurance covering property located in this state shall be made, issued, or delivered unless it conforms as to all provisions and the sequence of the standard or uniform form prescribed by the Commissioner, except that, with regard to multiple line coverage providing other kinds of insurance combined with fire insurance, this Code section shall not apply if the policy contains, with respect to the fire portion of the policy, language at least as favorable to the insured as the applicable portions of the standard fire policy and such multiple line policy has been approved by the Commissioner.

(b) The Commissioner shall file and maintain on file in his office a true copy of the standard fire policy designated as such and bearing the Commissioner’s authenticating certificate and signature and the date of filing. The standard fire insurance policy shall not be required for casualty insurance, marine and transportation insurance, or insurance on growing crops. Insurers issuing the standard fire insurance policy are authorized to affix to or include in such policy a written statement that the policy does not cover loss or damage caused by nuclear reaction or nuclear radiation or radioactive contamination, whether directly or indirectly resulting from an insured peril under the policy; provided, however, that nothing contained in this Code section shall be construed to prohibit the attachment to any such policy of an endorsement or endorsements specifically assuming loss or damage caused by nuclear reaction or nuclear radiation or radioactive contamination.

Georgia Code § 33-32-1

Georgia Rules & Regulations 120-2-19-.01 — Standard Fire Policy

Georgia Rules & Regulations Rule 120-2-19-0.01

Georgia Code § 33-24-46 — Cancellation or nonrenewal of certain property insurance policies.

(a) This Code section shall apply only to policies of insurance against direct loss to residential real property and the contents thereof, as defined and limited in standard fire policies insuring natural persons as the named insured.

(b) As used in this Code section, the term:

(1) “Claim against a policy” means a contact with an insurer by the insured under the policy or an affected third party for the express purpose of seeking payment of proceeds under the terms of the policy in question. A report of loss or a question relating to coverage shall not independently establish a claim against a policy nor be considered as a claim under Article 2 of Chapter 6 of this title.

(2) “Nonrenewal” or “nonrenewed” means a refusal by an insurer or an affiliate of an insurer to renew. Failure of an insured to pay the premium as required of the insured for renewal, a change in policy terms, or a reduction in coverage after the insurer has manifested a willingness to renew by delivering a renewal policy, renewal certificate, or other evidence of renewal to the named insured or his or her representative or has offered to issue a renewal policy, certificate, or other evidence of renewal or has manifested such intention by any other means shall not be construed to be a nonrenewal.

(3) “Policies” means a policy insuring a natural person as named insured against direct loss to residential real property and the contents thereof, as defined and limited in standard fire policies as approved by the Commissioner.

(4) “Reduction in coverage” means a change made by the insurer which results in a removal of coverage, diminution in scope or less coverage, or the addition of an exclusion. Reduction in coverage shall not include any change, reduction, or elimination of coverage made at the request of the insured. The correction of typographical or scrivener’s errors or the application of mandated legislative changes shall not be considered a reduction in coverage.

(5) “Renewal” means issuance and delivery by an insurer or an affiliate of such insurer of a policy superseding at the end of the policy period a policy previously issued and delivered by the same insurer or issuance and delivery of a certificate or notice extending the term of a policy beyond its policy period or term or the extension of the term of a policy beyond its policy period or term pursuant to a provision for extending the policy by payment of a continuation premium. Any policy with a policy period or term of less than six months shall, for the purposes of this Code section, be considered to have successive policy periods ending each six months following its original date of issue and, regardless of its wording, any interim termination by its terms or by refusal to accept premiums shall be a cancellation subject to this Code section. Any policy written for a term longer than one year or any policy with no fixed expiration date shall be considered as if written for successive policy periods or terms of one year and any termination by an insurer effective on an anniversary date of such policy shall be deemed a refusal to renew.

(1) No notice of cancellation of a policy as to which this Code section applies shall be effective unless mailed or delivered as prescribed in Code Section 33-24-44. The insurer shall provide the reason or reasons for such cancellation as required by Chapter 39 of this title.

(2) After coverage under a policy to which this Code section applies has been in effect more than 60 days or after the effective date of a renewal policy to which this Code section applies, a notice of cancellation may be issued only for one or more of the following reasons:

(A) Nonpayment of premium;

(B) Discovery of fraud, concealment of material fact, or material misrepresentation made by or with the knowledge of the insured in obtaining the policy, continuing the policy, or presenting a claim under the policy;

(C) The occurrence of a change in the risk which substantially increases any hazard the policy insures against; or

(D) The insured violates any of the material terms or conditions of the policy.

(1) No insurer shall refuse to renew a policy to which this Code section applies unless a written notice of nonrenewal is mailed or delivered in person to the named insured. Such notice stating the time when nonrenewal will be effective, which shall not be less than 30 days from the date of mailing or delivery of such notice of nonrenewal or such longer period as may be provided in the contract or by statute, shall be delivered as provided in subsection (d) of Code Section 33-24-14, in person, or by depositing the notice in the United States mail to be dispatched by at least first-class mail to the last address of record of the insured and of the lienholder, where applicable, and receiving the receipt provided by the United States Postal Service or such other evidence of mailing as prescribed or accepted by the United States Postal Service. The insurer shall provide the reason or reasons for nonrenewal as required by Chapter 39 of this title.

(2) An insurer shall provide a written notice of a reduction in coverage to the named insured no less than 30 days prior to the effective date of the proposed reduction in coverage; provided that such notice shall be in a separate document with the words “NOTICE OF REDUCTION IN COVERAGE” written in all capital letters in at least 12 point type. Such notice shall be delivered as provided in subsection (d) of Code Section 33-24-14, in person, or by depositing the notice in the United States mail to be dispatched by at least first-class mail to the last address of record of the insured and receiving the receipt provided by the United States Postal Service or such other evidence of mailing as prescribed or accepted by the United States Postal Service.

(e) When a policy is canceled other than for nonpayment of premium or in the event of a refusal to renew or continue a policy, the insurer shall notify the named insured of his possible eligibility for insurance through the Georgia Fair Access to Insurance Requirements Plan. The notice shall accompany or be included in the notice of cancellation or the notice of intent not to renew or not to continue the policy and shall state that such notice availability of the Georgia Fair Access to Insurance Requirements Plan is given pursuant to this Code section. Included in the notice shall be the address by which the Georgia Fair Access to Insurance Requirements Plan might be contacted in order to determine eligibility.

(f) There shall be no liability on the part of and no cause of action of any nature shall arise against the Commissioner or his employees or against any insurer, its authorized representatives, its agents, its employees, or any firm, person, or corporation furnishing to the insurer information as to reasons for cancellation or nonrenewal for any statement made by any of them and in written notice of cancellation or nonrenewal or in any other communication, oral or written, specifying the reasons for cancellation or nonrenewal or providing information pertaining thereto or for statements made or evidence submitted at any formal or informal hearing conducted in connection therewith.

(g) Return of unearned premium, if any, due to cancellations as to which this Code section applies shall be processed in accordance with Code Section 33-24-44.

(h) Notice to the insured shall not be required by this Code section when a policy is canceled by an insurance premium finance company under a power of attorney contained in an insurance premium finance agreement if notification of the existence of the premium finance agreement has been given to the insurer in accordance with the provisions of Chapter 22 of this title. However, the insurer shall comply with the provisions of subsection (d) of Code Section 33-22-13 pertaining to notice to a governmental agency, mortgagee, or other third party. Such notice shall be delivered as provided in subsection (d) of Code Section 33-24-14, in person, or by depositing the notice in the United States mail to be dispatched by at least first-class mail to the last address of record of such governmental agency, mortgagee, or other third party and receiving the receipt provided by the United States Postal Service or such other evidence of mailing as prescribed or accepted by the United States Postal Service.

(i) Cancellation by the insured shall be accomplished as provided in Code Section 33-24-44.1.

(j) No notice refusing the renewal of a policy issued for delivery in this state shall be mailed or delivered by an insurer or its agent duly authorized to effect such notice of nonrenewal for the following reasons:

(1) Lack of, lack of potential for, or failure to agree to a writing of supporting insurance business; (2) A change in the insurer’s eligibility rules or underwriting rules, provided that this paragraph shall not apply to a change in such rules if the change applies uniformly within a specific class or territory and such change has been approved by the Commissioner under subsection (k) of this Code section; and (3) Two or fewer claims against the policy within the preceding 36 month period if such claims are not attributable to the negligent or intentional acts of the insured or of persons residing at the insured premises.

(k) If the insurer demonstrates to the satisfaction of the Commissioner that renewal would violate the provisions of this title or would be hazardous to its policyholders or the public, paragraph (2) of subsection (j) shall not apply.

(1) If the insurer complies with subsection (d) of this Code section, no claim or action may be maintained with respect to a policy which is not renewed unless the named insured files a written notice with the insurer before the time at which nonrenewal becomes effective. The notice shall specify the manner in which the failure to renew is alleged to be unlawful under this subsection. In any subsequent action asserting a violation of subsection (c), (j), or (k) of this Code section, no violation may be alleged other than the specific allegations contained in the notice filed by the named insured.

(2) In addition to other requirements, a notice of nonrenewal shall contain the provisions of paragraph (1) of this subsection in substantially the form which follows: “NOTICE Code Section 33-24-46 of the Official Code of Georgia Annotated provides that this insurer must, upon request, furnish you with the reasons for the failure to renew this policy. If you wish to assert that the nonrenewal is unlawful, you must file a written notice with this insurer before the time at which the nonrenewal becomes effective. The notice must specify the manner in which the failure to renew is alleged to be unlawful. If you do not file the written notice, you may not later assert a claim or action against this insurer based upon an unlawful nonrenewal.”

(1) Notwithstanding subsection (j) of this Code section, the termination of an agency relationship shall be valid as a reason for a failure to renew a policy. In such case, if the named insured wishes to retain the policy with the particular insurer, the insured shall locate another agent of the insurer and apply for the policy with another agent of the insurer before the time at which the nonrenewal becomes effective. Upon receipt of the application, the insurer shall treat the application as a renewal and not as an original writing. Nothing in this paragraph shall abridge or supersede contractual rights of the terminated agency or the insurer, provided that these contractual rights do not adversely affect the privilege of the named insured to apply for renewal through another agent of the insurer.

(2) A notice of nonrenewal based upon the termination of an agency relationship shall contain the provisions of paragraph (1) of this subsection, in substantially the form which follows: “NOTICE Your policy has not been renewed because your present agent no longer represents this insurer. You have the option of procuring coverage through your present agent or retaining this policy by applying through another agent of this insurer. Code Section 33-24-46 of the Official Code of Georgia Annotated provides that if you will locate another agent of the insurer and apply for this policy before the time at which the nonrenewal becomes effective, this insurer will treat the application as a renewal and not as an application for a new policy.”

Georgia Code § 33-24-46

Georgia Code § 33-24-17 — Assignment of policies.

A policy may be assignable or not assignable, as provided by its terms. . . . Any assignment shall entitle the insurer to deal with the assignee as the owner or pledgee of the policy in accordance with the terms of the assignment until the insurer has received at its home office written notice of termination of the assignment or pledge or written notice by or on behalf of some other person claiming some interest in the policy in conflict with the assignment.

Georgia Code § 33-24-17

Georgia Code § 33-32-3 — Privilege of rebuilding or reinstating property sustaining loss or damage.

The privilege of rebuilding or reinstating property sustaining loss or damage shall not exist unless it is reserved in the policy.

Georgia Code § 33-32-3

Georgia Code § 33-32-4 — Refund of premium payments where insured sustaining total loss of property receives less than maximum amount payable under policy.

In the event of a total loss of property, if an insurer shall pay to the insured an amount less than the maximum amount authorized to be paid under an insurance policy covering the property, the insurer shall refund to the insured the difference between the amount of premiums actually paid for the insurance policy and the amount of premiums which would have been charged for a property insurance policy having a maximum amount payable equal to the amount actually paid by the insurer to the insured.

Georgia Code § 33-32-4

Georgia Code § 33-32-5 — Amount of insurance in certain fire policies deemed conclusive as to value of property covered.

(a) Whenever any policy of insurance is issued to a natural person or persons or to any legal entity wholly owned by a natural person or persons insuring a specifically described one or two family residential building or structure located in this state against loss by fire and the building or structure is wholly destroyed by fire without fraudulent or criminal fault on the part of the insured or one acting in his or her behalf, the amount of insurance set forth in the policy relative to the building or structure shall be taken conclusively to be the value of the property, except to the extent of any depreciation in value occurring between the date of the policy or its renewal and the loss, provided that, if loss occurs within 30 days of the original effective date of the policy, the insured shall be entitled to the actual loss sustained not exceeding the sum insured. Nothing in this Code section shall be construed as prohibiting the use of coinsurance or as preventing the insurer from repairing or replacing damaged property at its own expense without contribution on the part of the insured.

(b) Subsection (a) of this Code section shall not apply where:

(1) The building or structure is not wholly destroyed by fire;

(2) Insurance policies are issued or renewed by more than one company insuring the same building or structure against fire and the existence of the additional insurance is not disclosed by the insured to all insurers issuing policies;

(3) Two or more buildings or structures are insured under a blanket form for a single amount of insurance; or

(4) The completed value of a building or structure is insured under a builders’ risk policy.

Georgia Code § 33-32-5

Georgia Code § 33-6-3 — Unfair methods of competition or unfair and deceptive acts or practices prohibited.

No person shall engage in this state in any trade practice which is defined in this article as or determined pursuant to this article to be an unfair method of competition or an unfair or deceptive act or practice in the business of insurance.

Georgia Code § 33-6-3

Georgia Code § 33-6-4 — Enumeration of unfair methods of competition and unfair or deceptive acts or practices; penalty.

(b) The following acts or practices are deemed unfair methods of competition and unfair and deceptive acts or practices in the business of insurance:

(1) Making, publishing, disseminating, circulating, or placing before the public or causing directly or indirectly to be made, published, disseminated, circulated, or placed before the public in a newspaper, magazine, or other publication or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio station or in any other way an advertisement, announcement, or statement containing any assertion, representation, or statement with respect to the business of insurance or with respect to any person in the conduct of his insurance business, which statement, assertion, or representation is untrue, deceptive, or misleading;

(2) Making, issuing, circulating, or causing to be made, issued, or circulated any estimate, illustration, circular, or statement misrepresenting the terms of any policy issued or to be issued, the benefits or advantages promised thereby, or the dividends or share of the surplus to be received thereon; making any false or misleading statement as to the dividends or share of surplus previously paid on similar policies; making any misleading representation or any misrepresentation as to the financial condition of any insurer, as to the legal reserve system upon which any life insurer operates; using any name or title of any policy or class of policies misrepresenting the true nature thereof; or making any misrepresentation to any policyholder insured in any company for the purpose of inducing or tending to induce the policyholder to lapse, forfeit, or surrender his insurance.

(iii) Making or permitting any unfair discrimination in the issuance, renewal, or cancellation of any policy or contract of insurance against direct loss to residential property and the contents thereof, in the amount of premium, policy fees, or rates charged for the policies or contracts when the discrimination is based solely upon the age or geographical location of the property within a rated fire district without regard to objective loss experience relating thereto.

(iv) (I)Unfair discrimination prohibited by the provisions of this subparagraph includes discrimination based on race, color, and national or ethnic origin. In addition, in connection with any kind of insurance, it shall be an unfair and deceptive act or practice to refuse to insure or to refuse to continue to insure an individual; to limit the amount, extent, or kind of coverage available to an individual; or to charge an individual a different rate for the same coverage because of the race, color, or national or ethnic origin of that individual. The prohibitions of this division are in addition to and supplement any and all other provisions of Georgia law prohibiting such discrimination which were previously enacted and currently exist, or which may be enacted subsequently, and shall not be a limitation on such other provisions of law.

Georgia Code § 33-6-4

Georgia Code § 33-6-5 — Other unfair methods of competition and unfair and deceptive acts or practices.

In addition to Code Section 33-6-4, violations of the following provisions also are defined as unfair methods of competition and unfair and deceptive acts or practices in the business of insurance:

(8) No insurance company shall cancel, modify coverage, refuse to issue, or refuse to renew any property or casualty insurance policy solely because the applicant or insured or any employee of either is mentally or physically impaired . . . ; provided, further, that this paragraph shall not be interpreted to modify any other provision of this title relating to the cancellation, modification, issuance, or renewal of any insurance policy or contract;

Georgia Code § 33-6-5

Georgia Code § 33-6-6 — Power of Commissioner as to investigation of unfair or deceptive acts or practices generally.

(a) The Commissioner shall have the power to examine and investigate into the affairs of every person engaged in the business of insurance in this state in order to determine whether the person has been or is engaged in any unfair method of competition or in any unfair or deceptive act or practice prohibited by this chapter.

(b) In addition to any other authority granted to the Commissioner by this title and in addition to those reports required by Code Section 33-3-21, the Commissioner may require persons engaged in the business of insurance in this state to file reports by postal ZIP Code, where appropriate, or in any other format to enable the Commissioner to determine readily if such person has been or is engaged in any unfair method of competition or in any unfair or deceptive act or practice prohibited by this article.

Georgia Code § 33-6-6

Georgia Code § 33-6-7 — Conduct of hearings by Commissioner; rights of person being investigated; powers of Commissioner; service of process.

(a) Whenever the Commissioner shall have reason to believe that any person has been engaged or is engaging in this state in any unfair method of competition or any unfair or deceptive act or practice, whether or not defined in Code Sections 33-6-4 and 33-6-5, and have reason to believe that a proceeding by the Commissioner in respect to such unfair method of competition or such unfair or deceptive act or practice would be in the public interest, he shall issue and serve upon the person a statement of the charges in that respect and a notice of a hearing on the charges to be held at a time and place fixed in the notice, which time shall not be less than 15 days after the date of the service of the notice.

(b) At the time and place fixed for the hearing, the person shall have an opportunity to be heard and to show cause why an order requiring the person to cease and to desist from the acts, methods, or practices so complained of should not be made by the Commissioner. Upon good cause shown, the Commissioner shall permit any person to intervene, appear, and be heard at the hearing by counsel or in person.

(c) Nothing contained in this article shall require the observance at the hearing of formal rules of pleading or evidence.

(d) The Commissioner at the hearing may administer oaths, examine and cross-examine witnesses, receive oral and documentary evidence, subpoena and compel the attendance of witnesses, and require the production of books, papers, records, correspondence, or other documents which he deems relevant to the inquiry. The Commissioner at the hearing may and, upon request of any party, shall cause to be made a record of all the evidence and all the proceedings had at the hearing. In case of a refusal of any person to comply with any subpoena issued under this Code section or to testify with respect to any matter concerning which he may be lawfully interrogated, the Superior Court of Fulton County or the superior court of the county where the party resides, on application of the Commissioner, may issue an order requiring the person to comply with the subpoena and to testify; and any failure to obey any order of the court may be punished by the court as a contempt thereof.

(e) Statements of charges, notices, orders, and other processes of the Commissioner under this article may be served by anyone duly authorized by the Commissioner either in the manner provided by law for service of process in civil actions or by registering or certifying and mailing a copy of the statement, notice, order, or other process to the person affected by it at the person’s residence or principal office or place of business. The verified return by the person so serving the statement, notice, order, or other process, which return sets forth the manner of the service, shall be proof of the same; and the return post card receipt for the statement, notice, order, or other process, which receipt is registered or certified and mailed as provided in this Code section, shall be proof of the service of the same.

Georgia Code § 33-6-7

Georgia Code § 33-6-8 — Issuance of cease and desist orders; issuance of orders providing for other relief; change in orders; date on which orders appealable.

(a) If, after the hearing provided for in Code Section 33-6-7, the Commissioner shall determine that the person charged has engaged in an unfair method of competition or an unfair or deceptive act or practice, he shall reduce his findings to writing and shall issue and cause to be served upon the person charged with the violation a copy of the findings and an order requiring such person to cease and desist from engaging in the method of competition, act, or practice; and, if the act or practice is a violation of Code Sections 33-6-4 and 33-6-5, the Commissioner may at his discretion order any one or more of the following:

(1) Payment of a monetary penalty of not more than $1,000.00 for each and every act or violation, unless the person knew or reasonably should have known he was in violation of this article, in which case the penalty shall be not more than $5,000.00 for each and every act or violation;

(2) Suspension or revocation of the person’s license, if he knew or reasonably should have known he was in violation of this article; or

(3) Any other relief as is reasonable and appropriate.

(b) The Commissioner may, at any time before the serving of a copy of the petition for review filed in the Superior Court of Fulton County upon him or her, as provided for in Code Section 33-6-11, or after the expiration of the time allowed by law for the serving of the petition for review, if no petition for review has been thus served, amend or set aside in whole or in part any order issued by the Commissioner under this Code section whenever in the Commissioner’s opinion the facts and circumstances surrounding the case have so changed as to require the action or if the public interest shall so require. No change of an order in a manner unfavorable to the person charged or to the parties at interest shall be made except after notice and opportunity for hearing. The date of the Commissioner’s last order shall be the point of time from which it may be reviewed by appeal.

Georgia Code § 33-6-8

Georgia Code § 33-6-9 — Penalties for violations of cease and desist orders.

After notice and hearing and upon order of the Commissioner, any person who violates a cease and desist order under Code Section 33-6-8, while the order is in effect may, at the discretion of the Commissioner, be subject to any one or more of the following:

(1) A monetary penalty of not more than $10,000.00 for each and every act or violation;

(2) Suspension or revocation of such person’s license; or

Georgia Code § 33-6-9

Georgia Code § 33-6-32 — Definitions.

As used in [Georgia Code §§ 33-6-30 through 33-6-37], the term:

(1) “Insured” means the party named on a policy or certificate or as defined in the contract as the person with legal rights to the benefits provided by such policy or certificate.

(2) “Person” means an individual, corporation, association, partnership, reciprocal exchange, interinsurer, Lloyd’s insurer, fraternal benefit society, and any other legal entity engaged in the business of insurance, including but not limited to agents, brokers, counselors, and adjusters.

(3) “Policy” or “certificate” means any contract of insurance; indemnity; medical, health, or hospital service; or annuity issued by an insurer. “Policy” or “certificate” shall not mean contracts for workers’ compensation, fidelity, or surety insurance.

Georgia Code §33-6-32

Georgia Code § 33-6-33 — When claims settlement practice improper.

It is an improper claims settlement practice for any domestic, foreign, or alien insurer transacting business in Georgia to commit any act provided in Code Section 33-6-34 if such act:

(1) Is committed flagrantly and in conscious disregard of this title or any rule or regulation promulgated pursuant to this title; or

(2) Has been committed with such frequency so as to indicate a general business practice to engage in such conduct.

Georgia Code § 33-6-33

Georgia Code § 33-6-34 — Unfair claims settlement practices.

Any of the following acts of an insurer when committed as provided in Code Section 33-6-33 shall constitute an unfair claims settlement practice:

1) Knowingly misrepresenting to claimants and insureds relevant facts or policy provisions relating to coverages at issue;

(2) Failing to acknowledge with reasonable promptness pertinent communications with respect to claims arising under its policies;

(3) Failing to adopt and implement procedures for the prompt investigation and settlement of claims arising under its policies;

(4) Not attempting in good faith to effectuate prompt, fair, and equitable settlement of claims submitted in which liability has become reasonably clear;

(5) Compelling insureds or beneficiaries to institute suits to recover amounts due under its policies by offering substantially less than the amounts ultimately recovered in suits brought by them;

(6) Refusing to pay claims without conducting a reasonable investigation;

(7) When requested by the insured in writing, failing to affirm or deny coverage of claims within a reasonable time after having completed its investigation related to such claim or claims;

(8) When requested by the insured in writing, making claims payments to an insured or beneficiary without indicating the coverage under which each payment is being made;

(9) Unreasonably delaying the investigation or payment of claims by requiring both a formal proof of loss and subsequent verification that would result in duplication of information and verification appearing in the formal proof of loss form; provided, however, this paragraph shall not preclude an insurer from obtaining sworn statements if permitted under the policy;

(10) When requested by the insured in writing, failing in the case of claims denial or offers of compromise settlement to provide promptly a reasonable and accurate explanation of the basis for such actions. In the case of claims denials, such denials shall be in writing;

(11) Failing to provide forms necessary to file claims within 15 calendar days of a request with reasonable explanations regarding their use;

(12) Failing to adopt and implement reasonable standards to assure that the repairs of a repairer owned by the insurer are performed in a workmanlike manner;

(13) Indicating to a first-party claimant on a payment, draft check, or accompanying letter that said payment is final or a release of any claim unless the policy limit has been paid or there has been a compromise settlement agreed to by the first-party claimant and the insurer as to coverage and amount payable under the contract;

(14) Issuing checks or drafts in partial settlement of a loss or claim under a specific coverage which contain language which releases the insurer or its insured from its total liability;

(15) Failure to comply with any insurer requirement in Chapter 20E of this title, the “Surprise Billing Consumer Protection Act,” including:

(A) The failure to designate whether the healthcare plan is subject to the exclusive jurisdiction of the Employee Retirement Income Security Act of 1974, 29 U.S.C. Sec. 1001, et seq.;

(B) The failure to directly pay the provider or facility within 15 working days for electronic claims or 30 calendar days for paper claims any moneys due under Code Section 33-20E-4 or 33-20E-5; or

(C) The failure to pay a resolution organization as required under Code Section 33-20E-16; and

(16) Failure to comply with any insurer requirement relating to emergency services or care in Article 4 of Chapter 11 of Title 31, Article 1 of Chapter 20A of this title, Chapter 20E of this title, Chapter 21A of this title, Code Section 33-24-59.27, and Chapter 30 of this title.

Georgia Code § 33-6-34

Georgia Code § 33-6-35 — Notice of hearing; hearing procedures; cease and desist orders; penalties; judicial review; intervenors.

(a) Whenever the Commissioner has reason to believe that any person has engaged or is engaging in this state in any unfair claims settlement practice and has reason to believe that a proceeding with respect to such unfair claims settlement practice would be in the public interest, the Commissioner shall serve upon such person a statement of the charges in that respect and a notice of hearing in the same manner as provided in Code Section 33-6-7.

(b) The provisions of Code Sections 33-6-7 through 33-6-11, relating to hearings, cease and desist orders, penalties, judicial review, intervenors, and other matters in connection with violations of Article 1 of this chapter shall be applicable to violations of [Georgia Code §§ 33-6-30 through 33-6-37].

Georgia Code § 33-6-35

Georgia Code § 33-6-37 — Private cause of action not created or implied.

Nothing contained in [Georgia Code §§ 33-6-30 through 33-6-37] shall be construed to create or imply a private cause of action for a violation of this article.

Georgia Code § 33-4-6 — Liability of insurer for damages and attorney’s fees; notice to Commissioner and consumers’ insurance advocate. [ Bad Faith ]

(a) In the event of a loss which is covered by a policy of insurance and the refusal of the insurer to pay the same within 60 days after a demand has been made by the holder of the policy and a finding has been made that such refusal was in bad faith, the insurer shall be liable to pay such holder, in addition to the loss, not more than 50 percent of the liability of the insurer for the loss or $5,000.00, whichever is greater, and all reasonable attorney’s fees for the prosecution of the action against the insurer. The action for bad faith shall not be abated by payment after the 60 day period nor shall the testimony or opinion of an expert witness be the sole basis for a summary judgment or directed verdict on the issue of bad faith. The amount of any reasonable attorney’s fees shall be determined by the trial jury and shall be included in any judgment which is rendered in the action; provided, however, that the attorney’s fees shall be fixed on the basis of competent expert evidence as to the reasonable value of the services based on the time spent and legal and factual issues involved in accordance with prevailing fees in the locality where the action is pending; provided, further, that the trial court shall have the discretion, if it finds the jury verdict fixing attorney’s fees to be greatly excessive or inadequate, to review and amend the portion of the verdict fixing attorney’s fees without the necessity of disapproving the entire verdict. The limitations contained in this Code section in reference to the amount of attorney’s fees are not controlling as to the fees which may be agreed upon by the plaintiff and the plaintiff’s attorney for the services of the attorney in the action against the insurer.

(b) In any action brought pursuant to subsection (a) of this Code section, and within 20 days of bringing such action, the plaintiff shall, in addition to service of process in accordance with Code Section 9-11-4, mail to the Commissioner of Insurance a copy of the demand and complaint by first-class mail. Failure to comply with this subsection may be cured by delivering same.

Georgia Code § 33-4-6

Georgia Code § 33-24-8 — Admissibility in evidence of applications in actions between insurer and insured.

As to kinds of insurance other than life insurance, no application for insurance signed by or on behalf of the insured shall be admissible in evidence in any action between the insured and the insurer arising out of the policy applied for if the insurer, at expiration of 30 days after receipt by the insurer of written demand by or on behalf of the insured for a copy of the application, has failed to furnish to the insured a copy of the application reproduced by any legible means.

Georgia Code §33-24-8

Related Georgia Content

The brelly guide to public adjusting in georgia, proof of loss: the ultimate guide, the florida contractor’s guide to aobs: laws, requirements, and faqs.

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Assignment of Benefits, Part 5: Georgia

At the request of another one of our readers, this week we are going to take a look at Assignment of Benefits (“AOBs”) in Georgia and how they are handled there.

In Georgia, the contract is king and its terms will be upheld. “It is axiomatic that parties are bound by the terms of their insurance contracts. [] Contractual limitations are valid and will be enforced by the courts. [] Most significantly, Georgia law expressly provides that insurers may limit the assignability of rights under polices through the use of non-assignability clauses.” 1

The statute governing non-assignability clauses is Georgia is Ga. Code Ann., § 33-24-17, and it states as follows:

A policy may be assignable or not assignable, as provided by its terms. Subject to its terms relating to assignability, any life or accident and sickness policy issued under the terms of which the beneficiary may be changed upon the sole request of the policy owner may be assigned either by pledge or by transfer of title by an assignment executed by the policy owner alone and delivered to the insurer, whether or not the pledgee or assignee is the insurer. Any assignment shall entitle the insurer to deal with the assignee as the owner or pledgee of the policy in accordance with the terms of the assignment until the insurer has received at its home office written notice of termination of the assignment or pledge or written notice by or on behalf of some other person claiming some interest in the policy in conflict with the assignment.

However, as we have seen in some other states, so long as the assignment takes place after a loss, the claim can be assigned without the consent of the insurer. Back in 1905, the Supreme Court of Georgia addressed this issue and held:

The assignment of a fire insurance policy without the consent of the insurer, after a loss has occurred thereunder, does not render the policy void, but the assignee has the right to bring an action thereon. Such assignment is valid without the consent of the insurer, although the written transfer of the policy purports, by its terms, to be subject to the consent of the insurer. . . . An assignment of a fire insurance policy, after a loss has occurred, does not violate a provision against assignment. 2

Georgia law also provides to the assignee, the right to bring suit against the carrier. Georgia Code § 44-12-22, states, “all choses in action arising upon contract may be assigned so as to vest the title in the assignee. . . .” Further, Georgia Code § 44-12-24, notes that, “a right of action is assignable if it involves, directly or indirectly, a right of property,” but does not permit assignment of actions for, “personal torts, for legal malpractice, or for injuries arising from fraud to the assignor.”

If you have any specific questions on AOBs or would like to see your state come up sooner, please comment below, or send me an email at [email protected] .

As always, I’ll leave you with a (mildly) related tune, here’s Georgia’s own R.E.M. with one of their many hits, It’s the End of the World as We Know It (And I Feel Fine) :

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• Assignment of Benefits

Posted on: November 20, 2018

An assignment of benefits takes a lot of the hassle out of paying third parties to whom you might owe money after an accident or another event that triggers your insurance coverage.  Without an assignment of benefits for your health insurance, for example, your insurance company would pay you and then you would have to pay your medical care provider. 

In many cases, the insurance company can get discounts with the health care provider for your care, which means that an assignment of benefits is helpful for everyone in that situation.  The insurance company doesn’t have to pay as much, and you don’t have to deal with making sure all of your doctor bills get paid (except for co-pays or coinsurance). 

Assigning Benefits in Georgia

Consider another example of assigning benefits in Georgia .  Imagine that your house suffers wind damage after a storm.  You notify your insurance company of the loss, and they come out to provide a quote for the work that needs to be done.  Then, you line up a contractor to come work on your house.  The contractor will sometimes have you sign a document that allows him to contact your insurance company directly for payment, which means that you don’t have to pay the contractor out of your own pocket to get reimbursed, and you don’t have to wait to get a check from the insurance company to start work.  An assignment of benefits also gives the contractor the right to sue your insurance carrier (instead of you) if it doesn’t pay as well.

An insurance contract will state whether its benefits are assignable.  In most cases, they are, but not always.  Generally, as long as the loss takes place before the assignment, the assignment will be valid.  But, if you try to assign benefits before suffering the damage, it might not be valid.  For instance, if you know that a storm is coming, and you tell your friend, who is a contractor, that he can have the insurance benefits from the damage to your house as long as he comes over and fixes it right away, you might have some legal problems. 

In those circumstances, the insurance company may have needed to give prior approval before you give away the benefits to your insurance policy.  They have less control over how much the bill might be under these circumstances.  It’s best to just wait until after the damage has occurred to make any promises regarding your insurance proceeds. 

Do you want to learn more about assignment of benefits?

Assignment of benefits comes up most often in the health insurance context in personal injury cases.  Is someone requesting that you sign an assignment of benefits?  If so, you might want to have the team at John Foy & Associates review it before you make any decisions.  We can examine the document with you as part of our case evaluation process.  Fill out the form to your right or call us at 404-400-4000 to get your FREE consultation today.

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Handling Assignment of Benefit (“AOB”) Claims in the Wake of Hurricanes Irma and Harvey

Overview | Blog Posts | First-Party Coverage | Timothy Engelbrecht , T. Nicholas Goanos , L. Andrew Watson | Related | Print | Share

Timothy Engelbrecht

Partner | First-Party Coverage , Extra-Contractual 813-281-1900 [email protected]

T. Nicholas Goanos

Partner | Extra-Contractual , Arson & Fraud , Casualty Defense Litigation , Third-Party Coverage , First-Party Coverage 704-940-9811  [email protected]

L. Andrew Watson

Partner | First-Party Coverage , Extra-Contractual , Casualty Defense Litigation , Arson & Fraud , Third-Party Coverage 704-543-2321 [email protected]

September 12, 2017

Hurricanes Irma and Harvey have damaged large areas of Florida, Texas, and Louisiana, as well as brought heavy rain and wind to Georgia, North Carolina, and South Carolina. As insurers handle thousands of property damage claims in these areas, they will undoubtedly be presented with claims that have been assigned from insureds to damage-repair contractors. These are often referred to as assignments of benefits or “AOB” claims. This article explains briefly what an AOB claim is, how Florida, Texas, Louisiana, Georgia, North Carolina, and South Carolina address AOB claims, and the best practices for handling AOB claims.

WHAT IS AN AOB CLAIM?

The classic example of an AOB claim is the following: an insured suffers property damage and hires a repair contractor to repair that damage. The repair contractor requires the insured to execute a written document, usually entitled “Assignment of Insurance Benefits”, which says something to the effect of “for and in consideration of the contractor’s agreement to protect the property from further damage and/or make repairs, the insured assigns his/her/its insurance benefits to the contractor.” The contractor thereafter makes a claim directly to the insurer using the AOB.

HOW DOES FLORIDA, TEXAS, LOUISIANA, GEORGIA, NORTH CAROLINA, AND SOUTH CAROLINA ADDRESS AOB CLAIMS?

Florida  has allowed AOB claims for over 100 years. Sec. First Ins. Co. v. State, Office of Ins. Regulation , 177 So. 3d 627, 628 (Fla. 1st DCA 2015). Post-loss property damage claims are freely assignable in Florida regardless of whether the insurer consents or not.   Start to Finish Restoration, LLC v. Homeowners Choice Prop. & Cas. Ins. Co. , 192 So. 3d 1275, 1276 (Fla. 2d DCA 2016). An insurance policy that has a “non-assignment” clause only bars the assignment of the entire insurance policy, not an assignment of a post-loss insurance claim. Bioscience West, Inc. v. Gulfstream Prop. & Cas. Ins. Co. , 185 So. 3d 638, 640-41 (Fla. 2d DCA 2016). 

Texas  has adopted the opposite approach to AOBs. The general rule in Texas is that an insured cannot assign an insurance claim if the insurance policy has a non-assignment clause. ARM Props. Mgmt. Group v. RSUI Indem . Co., 642 F.Supp.2d 592, 609-10 (W.D. Tex. 2009) relying on  Tex. Farmers Ins. Co. v. Gerdes , 880 S.W. 2d 215, 218 (Tex. App. 1994). This is true even if the non-assignment clause is general and broadly worded.

Louisiana  takes a hybrid approach to AOBs. Louisiana allows an insurer to place a clause in an insurance policy that prohibits post-loss assignments.   In re Katrina Canal Breaches Litig ., 63 So. 3d 955, 962-63 (La. 2011). However, in order for such a clause to be enforceable, the clause must clearly and unambiguously express that it applies to post-loss assignments.   Id . The general and a broadly worded non-assignment clause that has traditionally appeared in most insurance policies is not sufficient. Id. 

Georgia , much like many of the States above and across the Country, permits AOBs.  See Santiago v. Safeway Ins. Co. , 196 Ga. App. 480, 481, 396 S.E.2d 506, 608 (App. Ct. 1990). Unlike North Carolina and South Carolina, which are discussed below, an assignee in Georgia may pursue his own extra-contractual claim only after first establishing a breach of the insurance policy.  Southern Gen. Ins. Co. v. Holt , 262 Ga. 267, 416 S.E.2d 274, 276-77 (1992). Further, before pursuing an extra-contractual claim, an assignee (or insured) in Georgia must provide the insurer an opportunity to “cure” the alleged “bad faith”. See  Ga. Code Ann. § 33-4-6.

Lastly,  North Carolina  and  South Carolina  also allow AOBs. In upholding the validity of an assignment, courts in these States have ruled not only that assignments of benefits are indeed valid, but also, that they are governed by each State’s general contract law. See e.g., Alaimo Family Chiropractic v. Allstate Ins. Co. , 155 N.C. App. 194, 197, 574 S.E.2d 496, 498 (App. Ct. 2002);  Gray v. State Farm Auto. Ins. Co. , 327 S.C. 646, 491 S.E.2d 272 (App. Ct. 1997). The “rubber” meets the proverbial “road”, though, when an extra-contractual claim is alleged. In North Carolina and South Carolina, a plaintiff may assert an extra-contractual claim, even if the insurer has not breached the insurance policy. See  Tadlock Painting Co. v. Maryland Cas. Co. , 322 S.C. 498, 473 S.E.2d 52 (1996);  Kielbania v. Indian Harbor Ins. Co., 2012 WL 3957926 (M.D.N.C. 2012). However, an assignee is limited in the sense that it may pursue only his own extra-contractual claim, and not the assignors.  Horton v. New S. Ins. Co. , 122 N.C. App. 265, 268, 468 S.E.2d 856, 858 (1996);  Davis v. Liberty Mut. Ins. Co. , 2015 WL 6163243, at *4 (D.S.C. 2015).

WHAT ARE THE BEST PRACTICES FOR HANDLING AN AOB CLAIM?

First, as noted above, an adjuster needs to know if the state law where the AOB claim is being made allows for AOB claims. 

Second, assuming the state allows for AOB claims, the adjuster needs to carefully read what the actual AOB document says. They are not all the same. Some AOBs assign the entire claim. Other AOBs only assign part of the claim. For example, imagine an insured’s property is damaged by water. The insured needs the water extracted and the structure rebuilt. An AOB might assign both the water extraction and the rebuild claim to a single contractor. Or, the insured might execute one AOB to a water extraction contractor and a separate AOB to a different rebuild contractor. Or, an insured might execute an AOB to a water extraction contractor and the insured will retain the remaining rights to make the rebuild claim. If the AOB is unclear what – exactly – is being assigned, it is important for the adjuster to speak with the insured and the contractor to ensure everyone is on the same page.

Third, the adjuster should speak to the insured to gather information necessary to understand and adjust the assigned claim. In Florida, an adjuster likely cannot require a contractor to perform the insurance policy’s post-loss conditions of giving documents, executing a sworn statement in proof of loss, or appearing for an examination under oath. Shaw v. State Farm Fire & Cas. Co.,  37 So. 3d 329, 332-33 (Fla. 5th DCA 2010) disapproved on other grounds in  Nunez v. Geico Gen. Ins. Co. , 117 So. 3d 388 (Fla. 2013). However, the insured is still responsible for fulfilling those conditions even with regard to the assigned claim. Id. The insured’s failure to do so may bar the assigned claim. Id. 

Fourth, assuming payment will be made on the assigned claim, the adjuster should determine who will be listed on the settlement check. If there is a valid AOB, it may be improper to list the insured on the settlement check since the insured’s rights have been assigned to the contractor. Many AOBs will state that only the contractor be listed on the settlement check. However, it is good for an adjuster to confirm with the insured that the insured understands that he/she/it will not be listed on the settlement check. It is also important for the adjuster to correctly determine if a mortgagee needs to be listed on the settlement check. Situations vary depending on the nature of the work that the contractor is doing (damage prevention versus repair) and whether the work has been completed or is still to be done. The adjuster should discuss the situation with the insured, the contractor, and the mortgagee if the adjuster is at all unsure if the mortgagee needs to be on the settlement check.

Fifth, an adjuster should know whether an assigned claim can be resolved using the insurance policy’s appraisal provision. Appraisal can be an inexpensive and expedient way to resolve a claim. In Florida, an insurer usually can require a contractor with an assigned claim to go to appraisal if the insurance policy provides for the mandatory appraisal upon request.  Certified Priority Restoration v. State Farm Florida Ins. Co ., 191 So. 3d 961, 962 (Fla. 4th DCA 2016).

Insurers will continue to be presented with AOB claims in the wake of Hurricanes Irma and Harvey. We have been helping insurers and adjusters navigate the unique issues associated with AOB claims for many years. Please contact us if you have any questions or need assistance.

For any further questions, please contact Timothy Engelbrecht, T. Nicholas Goanos, or L. Andrew Watson.

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• Received a document?

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

22 articles

Insurance , Restoration , Slow Payment

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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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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2010 Georgia Code TITLE 33 - INSURANCE CHAPTER 29A - INDIVIDUAL HEALTH INSURANCE COVERAGE ARTICLE 1 - AVAILABILITY AND ASSIGNMENT SYSTEM § 33-29A-5 - Georgia Health Benefits Assignment System

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Assignment of Benefit Laws

If your state is not listed, there are no known Assignment of Benefits laws. Please reach out to your state dental society for information on where they are with getting this legislation passed.

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