Second DCA Upholds Multiple Assignments
Florida’s Second District Court of Appeal has upheld the ability of a policyholder to make multiple assignments under a homeowners insurance policy. Nicon Construction v. Homeowners Choice Property and Casualty Insurance Company involved a policyholder’s issuing assignments of benefits to two separate vendors. The insurer argued that upon the policyholder’s assigning the policy rights to the first vendor, there were no further rights to be assigned to the second vendor. The circuit court agreed with the insurer, and an appeal to the 2nd DCA ensued.
The 2nd DCA reversed the trial court and found that both assignments were valid. The 2nd DCA reasoned that the assignments should be understood as pertaining only to the rights associated with each vendor’s respective services. Thus, if multiple services are required in connection with a claim, the policyholder can assign rights to multiple vendors.
This case illustrates the continuing problem with assignments of benefits (AOB) in Florida. Inflated losses and loss adjustment expenses are leading to availability issues in certain areas of the state and rising rate pressure throughout the state. Under section 627.428, Florida Statutes, an insured has a one-way right of attorneys’ fees in a legal action against his or her insurer. With the Nicon Construction case, the possibility exists that an insurer could face multiple lawsuits, and exposure to one-way attorneys’ fees from multiple parties, arising from a single claim. Continued absence of a legislative solution to this issue will only extend the availability and pricing concerns in the homeowners market.