Assignment of Benefits (AOB)
Also called: AOB, assignment agreement, post-loss assignment, direction to pay
Homeland Public Adjusters · Last reviewed: October 2026
An assignment of benefits (AOB) is a contract in which the policyholder transfers the right to the insurance claim payment, and the right to pursue the claim, to a contractor (typically a water mitigation company or roofer) in exchange for the work. Florida ended the practice for policies issued on or after January 1, 2023: under §627.7152(13), an attempt to assign post-loss property insurance benefits under such a policy is “void, invalid, and unenforceable.” Contractors now use direction-to-pay forms instead, which are not the same thing.
What an AOB did
From the policyholder’s side, signing the mitigation company’s paperwork after a leak meant the company billed the carrier directly, and if the carrier underpaid, the company (not the homeowner) could sue. From the carrier’s side, AOB litigation was blamed for much of Florida’s rate increases, and the Legislature first restricted AOBs in 2019 (the version of §627.7152 that applied to policies issued July 1, 2019 through December 31, 2022, with caps on emergency work and notice rules), then abolished them in the December 2022 special session.
What is still allowed
§627.7152(11) carves out an assignment to a later purchaser of the property with an insurable interest, a Chapter 709 power of attorney for a manager, family member or guardian to act for the insured, and liability coverage. A public adjuster’s fee is expressly not an assignment ((1)(b)). A direction to pay authorizes the carrier to issue payment to the contractor but leaves the claim, and the right to dispute it, with you; it is enforceable as a payment instruction, not as a transfer of the claim.
What it means on a 2026 claim
- The claim is yours. The mitigation company cannot negotiate it or sue on it; if the carrier underpays the mitigation invoice, you or your public adjuster dispute it.
- Read every post-loss form before signing. “Assignment” language on a policy issued after January 1, 2023 is void, but a direction to pay, a lien, or a personal guarantee of the invoice is not.
- Mitigation invoices are now part of your claim and count against sublimits such as the $10,000 limited water endorsement; see limited water damage endorsement.
- Older policies (issued before 2023) and claims under them can still carry valid 2019-era AOBs with their caps and notice requirements.
New Jersey
New Jersey never had an AOB statute like Florida’s; assignments of post-loss claims are generally permitted under ordinary contract law unless the policy prohibits them, and New Jersey courts have allowed post-loss assignments despite anti-assignment clauses. The practical risk is the same: signing a contractor’s assignment hands the claim to someone whose interest is the invoice, not the whole loss.
Frequently asked questions
Can a contractor still take an assignment of benefits in Florida?
Is a direction to pay the same as an AOB?
Is hiring a public adjuster an assignment?
I signed an AOB in 2021. Is it still valid?
Related terms
Three kinds of adjusters can show up on a property claim, and only one works for you.
A limited water damage endorsement caps the policy's payment for water damage from plumbing, appliances, HVAC and water heaters (non-weather water) at a stated amount, most often $10,000, in exchange…
A supplemental claim is a claim for additional loss or damage from the same peril the insurer has already adjusted, or for costs incurred while repairing under an open claim.
Overhead and profit (O&P) is the general contractor's charge for running the job: overhead is the cost of doing business (office, insurance, supervision, permits), and profit is the margin.
If this is your loss, call Homeland before you talk to the insurance company: Florida (305) 783-3777, New Jersey (732) 517-3777, 24 hours. A licensed public adjuster reviews the claim for free and calls you back right away. No Recovery, No Fee.
Sources
This article is for general information only and is not legal or insurance advice. Statutes, regulations and policy wording change, and how they apply depends on your own policy and the facts of your claim. Homeland Public Adjusters is a public adjusting firm, not a law firm.
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