Abuse of the Law: How Corrupt Contractors Can Scam You With an Assignment of Benefits

Insurance fraudIt’s a natural instinct: have as little to do with paperwork as possible. This goes double for emergency situations, such as water damage, when you require work to be done fast and without hassle. Apart from honest craftsmen, there are contractors who are more interested in making a quick buck at your expense than helping you execute your insurance rights. 

What Is an Assignment of Benefits?

At its core, an Assignment of Benefits is a document that transfers (assigns) your insurance claim to another party. The particulars may vary between cases, but in nearly all instances, if you sign such a document, you effectively forfeit control of the claim process to whomever has you sign the form. In the best possible scenario, this will only result in you losing any insurance money you would receive otherwise – perhaps you’ll even see your property restored by the contractor.

Usually however, the results are worse – as was the case for a woman from Orlando, where the emergency contractor turned out to be a person serving probation for grand theft auto. After she signed the Assignment of Benefits, he collected seven thousand dollars from her insurance company and disappeared after tearing out her kitchen. The end result? No kitchen, no repairs, and plenty of regrets. 

Avoiding the Problems

The solution seems obvious: avoid signing this form whenever it comes up. In practice, rational thought often takes a backseat to emotion in stressful situations. As such, in order to ensure that you don’t forfeit your rights without a proper cause, ensure that you:

  • Keep the telephone number of your insurance company on hand. Whenever an emergency situation arises, your insurance company should be the first number you dial. Don’t use the Internet to find a company that will provide a quick fix, as this will only hurt you in the long run. Your insurer will assess the damage as soon as possible and find a contractor who will do a good job without asking for a pound of flesh in return.
  • Remain calm. Granted, it’s difficult to do when water is spilling from your bathroom and ruining an expensive wooden floor that dates back a century or two, but acting in haste will only hurt you.
  • Don’t listen to contractors trying to convince you to transfer your claim. Many unsavory contractors try to sweeten the deal and obfuscate their intentions by advertising free inspections, offering cash benefits, or trying to play off the myriad fears that affect homeowners. Remain calm and work through your insurance company. It might take slightly longer to get the damage fixed, but you won’t run into trouble down the road.

Just How Frequent is This Form of Abuse?

The origins of the Assignment of Benefits scam are unclear. What is clear is that it has gained increased popularity among corrupt lawyers and contractors, with the number of cases in Florida alone increasing from a little over 9,000 in 2006 to over 92,000 in 2015: A tenfold increase over nine years!


Whether you are looking to insure your automobile, home, mobile home, motorcycle, watercraft, or if you need coverage for your business such as general liability, workers compensation, commercial auto, E&L Insurance has you covered! Let’s face it! Shopping for insurance can be a grueling process. Here at E&L Insurance, we focus on counseling customers on the best coverage options, at the best possible rates. What makes us different from other agents? As an independent insurance agency, we are appointed and represent the most reputable insurance companies in Florida. This allows us to provide more options, at a higher level of service that other agents cannot offer. Our customer service representative are here to help you in all your insurance needs. Call us today at 888-700-4049 or visit www.eandlinsurance.com! Se Habla Español

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Posted in Personal Insurance
One comment on “Abuse of the Law: How Corrupt Contractors Can Scam You With an Assignment of Benefits
  1. […] session has adjourned with a complete failure to pass any solution to the out-of-control Assignment of Benefits (AOB) scams that are driving up insurance rates all over the state. The legislation would have offered […]


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