Assignment of Benefits (AOB)
A legal agreement in which a policyholder transfers the right to receive insurance payments to a third party.
What is Assignment of Benefits (AOB)?
An Assignment of Benefits (AOB) is a legal agreement where a policyholder transfers their insurance claim rights to a third party, such as a contractor or service provider, allowing them to file and collect directly from the insurer.
Why It Matters?
It streamlines claims processing but can increase exposure to disputes or fraud if misused.
Example
A homeowner signs an AOB so a roofing company can directly claim insurance payment for storm damage repairs.
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