Assignment Of Insurance Proceeds

Victor hires a water damage contractor called Rapid Restoration to repair the damage to his building.

He tells the contractor that he needs the repairs done quickly as he is anxious to reopen his restaurant.

The anti-assignment clause doesn't distinguish between assignments made before a loss and those made afterward.

Even so, courts in most states have allowed policyholders to assign their rights to another party after a loss has occurred. Here is an example of a post-loss assignment of insurance benefits.

The court found that under Oklahoma law, allowing an insured to assign the right to pre-loss coverage would force the insurer to protect an insured with whom it had not contracted, one who might present a greater level of risk than the insured.

But, where the claim has already matured, the “subject” of the assignment is a recognized “chose in action” against the insurer.

The assignee sued the insurer to enforce its rights and duties pursuant to the assignment.

After the fire, the insured assigned any rights it may have, including any right to payment of insurance proceeds.

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Late one January night two water pipes in the building freeze.If the individual dies, the business cannot survive unless it is sold to someone else.An anti-assignment clause is intended to prevent the insurer from unwittingly assuming risks it never intended to take on.In the standard ISO policies, the anti-assignment clause is located in a separate form called the Common Policy Conditions.These conditions apply to all coverages that are included in the policy.The pipes subsequently burst, causing considerable water damage to Victor's building.Victor is forced to close his restaurant until the repairs are completed.Victor agrees to the assignment and the contractor begins the repair work.While Vital Vittles' commercial property policy contains an anti-assignment clause, Victor has assigned his rights to Rapid Restoration after a loss has occurred. The district court had previously found the insured, as the purchaser of a shopping mall that caught fire, had an insurable interest in the mall at the time of the loss.The policy provided under the “Transfer of Your Rights and Duties” section that “[y]our rights and duties under this policy may not be transferred without our written consent….” The court held that the policy precluded only pre-loss, not post-loss, assignments.

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