Assignment of Benefits (AOB)
Definition:
A legal agreement allowing a contractor or third party to receive claim payments directly from the insurer.
Explanation:
By signing an AOB, the homeowner transfers their rights under the policy for that portion of the claim. While convenient, it can limit the homeowner’s control over the claim process.
Example:
If you sign an AOB with a water mitigation company, the insurer may pay them directly for drying services instead of reimbursing you.
Why it matters:
This term affects how claims are handled and what payout a homeowner may receive.