What is an assignment of benefits?

An assignment of benefits (AOB) is a legal document in California that transfers the right to collect insurance benefits from the policyholder to another party. This document is often used to allow a third-party, such as a contractor, to file an insurance claim on behalf of the policyholder. AOBs are commonplace in the property insurance industry in California and are often used to pay for the repairs or replacement of damaged property. When a policyholder signs an AOB, they are giving the third-party the legal authority to represent them in their insurance claim. This means that the third-party can take the lead on the claim process, including filing the claim, negotiating with the insurance company, and ultimately receiving the payment for the claim on behalf of the policyholder. The policyholder still maintains ultimate control over the claim, but the AOB allows the third-party to handle much of the day-to-day claim work. Assignment of benefits can be beneficial for policyholders who may lack the expertise or experience to effectively navigate the insurance claim process or those who do not have the time or resources to file a claim themselves. However, policyholders should take care when signing an AOB, as it can lead to problems if the third-party is not qualified or experienced in filing insurance claims. It is important to read the AOB document carefully and to understand the implications of signing it before doing so.

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What is an assignment of benefits?

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