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Florida Appeals Court Rules in Favor of Policyholder in Assignment of Benefits Case


On February 9th, 2018, Florida’s Fifth District Court of Appeal ruled in favor of the policyholder in the case of Restoration v. ASI Preferred. This case involved a dispute of the assignment of benefits, a hot topic in Florida in recent years. Specifically, the issue at stake was whether or not an insurance company can require a mortgage lender’s approval before allowing a property owner to assign benefits.

In light of recent rulings from the Florida Office of Insurance Regulations, the Fifth District Court of Appeals determined that insurance companies in Florida do not have the right to require mortgage lender approval in assignment of benefits cases. Here, our top-rated Broward County property insurance lawyers analyze the decision and explain what it means for Florida property owners.

Case Analysis: Restoration v. ASI Preferred 


Florida property owner Alex Tchekmeian sustained damage that was covered under his insurance policy. Mr. Tchekmeian agreed to assign his benefits to Restoration 1 CFL in exchange for immediate and emergency water cleanup services. Notably, Mr. Tchekmeian still had a mortgage on the property. His lender, Wells Fargo, did not consent to his decision to assign benefits. When the water cleanup company, Restoration 1 CFL, filed a claim against the insurance company, ASI Preferred, that claim was denied on the grounds that the mortgage lender never consented to the assignment of benefits.

The Decision 

A lower court agreed with the insurance company’s decision to deny the claim. In the view of the court, the mortgage lender consent was required for benefits to be assigned to a contractor. The insurance company had some grounds to stand on: it pointed to explicit language within the policy that stated that benefits could not be assigned without consent from all insured parties, including mortgage lenders.

However, in recent months, Florida’s Office of Insurance Regulation has moved against insurers using this type of language. In late 2017, Florida’s Fifth District Court of Appeals agreed that the state’s top insurance regulator had the power to disapprove of this type of contract language. In this case, the Fifth District Court of Appeal again reaffirmed that decision. The insurance policy language in this case was deemed to be an improper restriction on a policyholder’s ability to assign post-loss benefits. As such, the lower court’s decision was reversed, and the case was remanded for additional proceedings. Going forward, it appears that Florida courts will not allow insurers to include policy language that requires mortgage lender approval for the assignment of benefits.

Get Help With Your Property Insurance Claim in Broward County

At Geyer Fuxa Tyler, our dedicated South Florida property insurance claims lawyers have extensive experience handling claims involving the assignment of benefits. If you need legal advice, we are here to help. For a free, no strings attached case evaluation, please do not hesitate to reach out to us today. With an office in Sunrise, we are proud to represent property owners throughout Broward County, including in Deerfield Beach, Miramar, Plantation, and Coral Springs.


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