Hunton Insurance Recovery Blog

Florida’s Second District Court of Appeals ruled on Friday that a homeowner’s insurance policy provision restricting assignment without the insurer’s consent does not restrict the post-loss assignment of policy benefits to an emergency water mitigation company, reversing the trial court’s ruling on summary judgment. In Bioscience West, Inc. v. Gulfstream Prop. & Cas. Co., the homeowner suffered a water loss and hired Bioscience to perform emergency water mitigation. Case No. 2d14-3946 (Fla. 2d DCA Feb. 5, 2016). In return for its services, the homeowner assigned the benefits of her insurance policy to Bioscience under an agreement permitting Bioscience to directly bill the insurer. The insurer, Gulfstream Property and Casualty Company (Gulfstream), refused to pay Bioscience as assignee, citing the policy’s assignment provision. Bioscience sued Gulfstream for breach of contract. The trial court granted summary judgment in favor of Gulfstream, finding that the policy’s assignment provision precluded the post-loss assignment to Bioscience without the insurer’s consent.

The assignment provision provides: “Assignment. Assignment of this policy will not be valid unless we give our written consent.” Bioscience argued that this language “merely prohibits an insured’s assignment of the entire policy without [the Insurer’s] consent, but that it does not [prohibit] an insured’s unilateral assignment of a benefit derived from the policy.” (Emphasis added). The Second District Court of Appeals agreed, reversing the trial court and stating that the assignment here was a “right to seek payment for the mitigation services it rendered under the policy, not an assignment of ‘this policy’ issued by Gulfstream to Bioscience.”

The court also rejected Gulfstream’s argument that the assignment of benefits violated Fla. Stat. 626.854(16) (Florida’s Public Adjusting Statute) and Fla. Stat. 627.405 (requiring an “insurable interest” in “the things at the time of loss”). The court cited Florida’s nearly 100-year history of upholding post-loss assignments of benefits without insurer approval, even where policy language otherwise purports to prohibit assignment of the policy. The court distinguished the post-loss assignment of policy benefits from an assignment of the policy as a whole, emphasizing the practical purpose of post-loss assignments. “Repairing a home after an unexpected loss event is often a time-sensitive procedure. An insured simply cannot afford to wait for an insurance claim to be adjusted to address that loss, and insurance benefits represent the most ready means of paying for post-loss emergency repairs.”