A Florida appellate court recently held that benefits under a policy are freely assignable without the consent of the insurer. Bioscience West, Inc. v. Gulfstream Prop. & Cas. Ins. Co., 2016 WL 455723 (Fla. 2d DCA Feb. 5, 2016).
The insured sustained water damage to her residence and retained a water mitigation service to perform emergency water removal and construction services. The insured executed an assignment of insurance benefits in favor of the water mitigation company. The insurer denied the claim, concluding that the policy did not provide coverage for the claimed damages. The water mitigation company, as assignee of the insured, sued the insurer for breach of contract, alleging that the insurer wrongfully denied coverage for the claim.
The insurer moved for summary judgment, which the trial court granted, finding that Florida law and the terms of the insurance policy precluded the insured from assigning benefits of her homeowner’s policy to the water mitigation company without the insurer’s consent. The trial court also reasoned that any “assignment improperly purports to transfer the right or privilege to adjust the claim to Plaintiff.” The water mitigation company appealed.
On appeal, the appellate court reversed and remanded the case for further proceedings. The water mitigation company argued that the policy’s clear and unambiguous language states that the insured was contractually prohibited from transferring her interest in the entire policy to the water mitigation company without first receiving the insurer’s consent, but not an insured’s unilateral assignment of a benefit derived from the policy.
The appellate court agreed that there was contract language restricting the post-loss assignment of benefits without the insurer’s consent, but noted that Florida law prohibits an insurer from restricting an insured’s unilateral post-loss assignment of a benefit derived from that policy. Thus, the appellate court held that because the insured merely assigned her rights to benefits and proceeds under the policy pertaining to services for emergency water removal and construction services performed by the water mitigation company, the insured was not required to obtain the insurer’s consent before assigning her rights under the policy. The appellate court noted competing policy considerations, but stated that those considerations are for the legislature to decide, not the court.