Volume 12, Issue 5 - September/October 2010

The Law
legal notes

Want to Get Paid?
by Harvey Cohen

It happens everyday, thousand and thousands of times a day. You do a windshield replacement job using the best products and the utmost care. You and your staff have been trained to always think of safety first and you comply with the Auto Glass Replacement Safety Standard (AGRSS). You bill the insurance company in accordance with pricing suggested by National Auto Glass Specifications International (NAGS).

And then, lo and behold, the insurance company sends you a check for only 60 percent of the amount you billed. What do you do now? What are your rights?

The answer depends on whether or not you used an assignment or work authorization.

Using an AOB
A large percentage of work by auto glass businesses is billed to insurance companies, and if you want to own these claims, you must utilize an insurance assignment of benefits (AOB). An assignment allows you to step into the shoes of the insured. Now the insurance claim is yours to pursue. You own the rights and benefits under the contract. Remember, there is a difference between assigning an insurance policy and an insurance claim. Generally, insurance policies are not assignable. For example, if you buy my house or my car, I cannot “assign” you the insurance policy on that property. You must purchase your own policy. However, in most states, you can assign your rights and benefits under a policy. This includes the right to be paid directly by the insurance company and the right to sue if the insurance company does not pay you in full.

Some states, including Florida, have a “fee-shifting” statute. That means that if you have a claim and you are forced to hire an attorney to collect from the insurance company and you win, the insurance company has to pay your claim in full, plus interest when applicable, and all your reasonable attorney fees and costs. It is a win-win for the auto glass industry.

Effective Assignments
For an assignment to be effective, it must be signed by the policyholder or an authorized representative. The assignment must assign all rights and benefits under the policy. There is no specific language required, but the assignor must make some clear statement of intent to assign clearly identified contractual rights to the assignee.

It is a two-step process. First you get the assignment of benefits and then, if you win your dispute with the insurance company, the insurance company must pay your claim, plus interest (when applicable) and reasonable attorney’s fees.

What does this mean to you? It means huge profits to your bottom lines. For example, if your billings are $1,000,000 per year and the average insurance company deduction is 25 percent off NAGS, you could make an additional $250,000 for doing the same amount of work.

Harvey Cohen is a partner in the law firm of Cohen Battiste in Winter Park, Fla. Mr. Cohen’s opinions are solely his own and not necessarily those of this magazine.

Need an Assignment of Benefits?
Visit http://www.agrrmag.com/documents/AOB_Sept-Oct_AGRR_Only%20Online.pdf to download a complimentary sample Assignment of Benefits prepared by Harvey Cohen

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