Insurance Assignment Agreement (Assignment of Benefits) Template

Insurance Assignment Agreement (Assignment of Benefits) Template FAQ

What is an insurance assignment agreement?

An insurance assignment agreement, often called an assignment of benefits or AOB, is a document in which a policyholder transfers certain insurance claim rights or policy benefits to a third party. In practice, this can allow the assignee to seek payment directly from the insurer and, depending on the wording and applicable law, communicate with the insurer about the assigned claim.

Why do you need an insurance assignment agreement?

You need an insurance assignment agreement when the insured wants a provider, contractor, repair company, or similar third party to receive insurance proceeds or handle part of the claim process directly. A written agreement helps clarify what rights are being assigned, whether the assignment is limited, and how any insurance payment should be applied.

When should you use an insurance assignment agreement?

Use this document when a policyholder wants to assign eligible insurance benefits connected to a specific loss, service, repair, or claim. AOB arrangements are commonly seen in health insurance and in some property-claim situations, but whether they are allowed can depend on the type of policy and state law. For example, Florida states that certain auto-glass and ADAS assignments are void for policies issued or renewed on or after July 1, 2023.

How to write an insurance assignment agreement?

Start by identifying the assignor, the assignee, the insurer, and the insurance policy or claim. Then state exactly which benefits or payment rights are being assigned, whether the assignee may communicate with the insurer or submit claim materials, and whether the assignment is limited to a particular service, invoice, repair, or loss. It is also helpful to address excess proceeds, cooperation duties, revocation terms, and the fact that the assignment remains subject to policy terms and applicable law.

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