Assignment of Benefits: A Mortgagee's Consent Matters


By: Michael Kouskoutis

Policyholders John and Liza Squitieri suffered a water loss in their Florida home.  Following the loss, Mrs. Squitieri signed an assignment of benefits (AOB) to Restoration 1, an emergency restoration services company.  However, the Squitieri’s policy contained a provision requiring an AOB to have written consent of all insureds and mortgagees.  The insurer declined to pay Restoration 1’s invoices on the basis that neither Mr. Squitieri nor the mortgage company executed the assignment.  Soon thereafter, Restoration 1 filed suit.  The trial court granted the insurer’s motion to dismiss, and Florida’s Fourth DCA affirmed the dismissal, holding that the policy’s anti-assignment provision was unambiguous and not in conflict with the Florida Supreme Court’s 1917 ruling in West Florida Grocery Co. v. Teutonia Fire Insurance, that AOBs cannot be limited by insurer consent.  Most notably, the Fourth DCA acknowledged that its holding may be at odds with the Fifth DCA’s recent decision in Security First Insurance v. Florida Office of Insurance Regulation, which interpreted West Florida Grocery to forbid any consent provision restricting post-loss AOBs.  The Fourth DCA certified the conflict to the Florida Supreme Court.

To date, policy limitations regarding insurer and mortgagee consent have not been widely litigated.  However, as these issues reach Florida’s high court, insurers across the country should keep an eye the outcome.  If you have any questions or would like more information, please contact Michael Kouskoutis at