Assignment of Claim Payment

Farm Bureau Mutual Insurance Company's Policy States, “Change/Assignment of Interest—No change of interest in this policy is effective unless we consent in writing. However, if a “named insured” dies, we will protect the legal representative as “named insured.”"

The insured signs an assignment with a windshield repair shop for the payment of the windshield repair to be paid to the windshield repair shop directly. There is a second assignment from the windshield repair shop to NEON LLP for Neon to collect the windshield repair shop's outstanding repair statements from the insurer.

Does the policy provision stated above preclude either the NEON or the repair shop to stand in the shoes of the insured? Does the policy provision preclude assignments as they pertain to recovery of the insured's proceeds due under the policy? Only the insured can receive monies due under the policy?

Pennsylvania Subscriber

In the situation you present, depending on how the assignment is worded, the insured has not transferred the policy rights to the repair shop; he has simply transferred one particular claim payment to the provider of the service. Unless the assignment states that all policy benefits for the remaining term of the policy are assigned to the shop, the insured is still the insured on the policy, will presumably continue to pay the premiums and there has been no change in the nature of the risk. An assignment of benefits is not an assignment of interest in a policy.

This premium content is locked for FC&S Coverage Interpretation Subscribers

Enjoy unlimited access to the trusted solution for successful interpretation and analyses of complex insurance policies.

  • Quality content from industry experts with over 60 years insurance experience, combined
  • Customizable alerts of changes in relevant policies and trends
  • Search and navigate Q&As to find answers to your specific questions
  • Filter by article, discussion, analysis and more to find the exact information you’re looking for
  • Continually updated to bring you the latest reports, trending topics, and coverage analysis