It is very common for insureds to assign the benefits of their insurance policies after receiving a loss so that their properties can be repaired. In many instances, the insurance companies, contrary to the laws in the State of Florida, insert illegal clauses in their policies preventing insureds from assigning their loss benefits.
In two recent cases, Florida’s Second District Court of Appeal held that Florida law prohibits insurance companies from restricting an insured’s unilateral post-loss assignment of a benefit derived from an insurance policy.
In Bioscience West, Inc. v. Gulfstream Property Cas. Ins. Co., the insured suffered water damage and assigned her claim to Bioscience West, Inc. (“Bioscience”) so that Bioscience could perform emergency water removal and construction services on her home. 185 So. 3d 638, 639-640 (Fla. 2d DCA 2016).
Gulfstream Property Cas. Ins. Co. (“Gulfstream”) denied Bioscience’s claim and, after Bioscience filed suit for breach of contract, the trial judge held that the insured’s policy prohibited the assignment of benefits without Gulfstream’s consent. Id. at 640. On appeal the appellate court pointed out that, “Florida case law yields deep-rooted support for the conclusion post-loss assignments do not require an insurer’s consent.” Id. at 642-643(citing One Call Property Services, Inc. v. Security First Ins. Co., 165 So. 3d 749, 755 (Fla. 4th DCA 2015).
Likewise, in Start to Finish Restoration, LLC v. Homeowners Choice Property & Cas. Ins. Co., Inc., the insured, after sustaining water damage, assigned his insurance claim to Start to Finish Restoration, LLC (“Start to Finish”) so that Start to Finish could repair the insured’s home. 2016 WL 3216528, *1 (Fla. 2d DCA 2016). After a dispute arose between Start to Finish and Homeowners Choice Property & Cas. Ins. Co., Inc. (“Homeowners Choice”) over payment, Start to Finish filed a lawsuit against Homeowners Choice. Id.
The trial court, as in Bioscience, was persuaded with Homeowners Choice’s argument that the insured’s benefits could not be assigned pursuant to the policy and granted summary judgment in favor of Homeowners Choice. Id. The appellate court, in citing Bioscience, reversed the summary judgment entered against Start to Finish and remanded the case to the trial court. Id. This is great news for Florida insurance benefit assignors.
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