AOB Restrictions Again Rejected in Fifth District
The 5th District Court of Appeal dealt another setback to insurers dealing with the “assignment of benefits” issue that continues to lead to rising insurance rates and restricted capacity in some areas of the state. The latest in a string of adverse judicial decisions came last week in Restoration 1 CFL, LLC v. ASI Preferred Insurance Corporation. In this case, the insured assigned rights under the policy to the vendor. However, the insured’s mortgagee, Wells Fargo, did not consent to the assignment. The insured’s policy contained a provision specifying that it could not be assigned without the consent of all persons covered under the policy, including additional insureds or mortgagees. In light of the lack of consent from the mortgagee, the insurer sought to dismiss a lawsuit brought by the vendor as assignee under the policy.
The trial court dismissed the vendor’s lawsuit, and the vendor appealed. The 5th DCA then reversed the dismissal. The court noted that in Security First Insurance Company v. Office of Insurance Regulation, it previously had declared policy provisions invalid when they restrict assignments by purporting to require approval of all insureds. The 5th DCA determined that because the assignment in favor of the vendor was not invalidated by ASI Preferred’s policy language, the trial court’s dismissal of the suit was improper.
Both the judicial and legislative processes thus far have proved ineffective in curtailing concerns with assignments of benefits and their impact on the insurance premiums ultimately paid by all Floridians. The well-publicized trends in this area therefore are likely to continue.