assignment of insurance claim to buyer

Selling Your Home With An Open Insurance Claim

May 1, 2020

The Importance of Documentation When Selling Your Home With An Open Insurance Claim

By Kyle Hyman

Selling your home during the pendency of an open homeowner’s insurance claim can raise a lot of legal questions. Whether you intend to retain the right to receive insurance benefits under the policy or assign them to the new buyer, it’s important that you document the damages and make necessary disclosures to protect your legal and financial interests.  Here are some pointers on what to document when selling our home with an open insurance claim to ensure you recover what you are owed.

First, it is important to disclose to your realtor that you have an open insurance claim before listing your home. Concealing damage or known problems at your property from potential buyers can land you in hot water. Generally, Florida law requires that sellers disclose facts or conditions which are not readily apparent and that have a material impact on the value and desirability of the property. Therefore, it is good practice to complete a seller’s disclosure form to clearly document to the buyer that there is unrepaired damage to the property.  Notice of an open insurance claim should also be given to the buyer because it may affect their ability to get new insurance while there is an open claim.

If the buyer is aware of the open insurance claim and still wants to move forward with the sale, you have a few options. For instance, you may choose to assign the insurance claim to the new buyer so that they can receive the insurance proceeds directly from the insurance carrier. Post-loss assignments of insurance claims in connection with the sale of a property are not overly complicated, but it is always best to have an attorney review the agreement prior to signing. Failure by the parties to clearly convey their intent to transfer the right to receive benefits could render the assignment unenforceable and take away the buyer’s standing to obtain the benefits owed in court. 

Another option is to maintain the insurance claim in your name and sell the property for a reduced amount. If you decide to go this route, be sure to clearly state in the sale documents how much you are reducing the price of the home for due to the unrepaired damage. This will help establish a more exact estimation of the cost to repair and substantiate the basis for the reduction in price. Once again, a seller’s disclosure form comes in handy to show (1) the buyer was on notice of the damages at the time of the sale and (2) that the cost to repair was contemplated in the reduced sale price. Your realtor should also be able to provide you with comparable sales in your area to help determine the fair market value of your home had repairs been performed. 

You will also want to have a general contractor, professional estimator, or an experienced insurance appraiser evaluate the damages prior to the sale. A detailed, line-item estimate will verify the cost to repair and be useful when trying to determine the actual cash value of the damaged property. Similarly, if your insurance carrier is disputing coverage or the cause of the loss, you may want to have a licensed engineer inspect your property. Determining cause of loss is crucial to coverage disputes and you may not have an opportunity to evaluate the damages again once the home is sold and repairs performed by the new buyer.

As Denzel Washington so perfectly stated in the movie Training Day , “It’s not what you know, but what you can prove.” Properly documenting damage and the terms of the sale agreement can substantially affect the outcome of your insurance claim. When in doubt, consult an attorney to discuss your legal rights and obligations to make sure you are adequately protecting your interests. 

Kyle Hyman, Esq.

Learn more about Kyle here!

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How Does Selling a Property Impact an Insurance Claim?

Consider the following situation which poses what I like to refer to as a “law school exam question.”

The issue at hand arose when an insured had a contract to sell his property, but prior to closing, the building sustained a fire. Your understanding will likely result in a smoother sale of your business or home and get more dollars faster into the account of the “right” party.

The dilemma:

• What happens next?
• Can the property change hands?
• Does the insurance company and claim hold up the transfer?
• Who collects the insurance proceeds — the seller, whose property was burned, or the buyer, whose property is damaged? Perhaps both?
• Does the determination depend on the purchase agreement? What if there is an anti-assignment clause in the insurance policy? Who has the insurable interest?

This particular recent conundrum allowed me the opportunity to don my “legal-eagle” cap and along with my experience as a public insurance claims adjuster, provide bases for possible solutions.

CONTACT SILL | Tell us about your property damage

Well, take out your bluebooks (sorry, that dates me, I know) and begin writing . . .

We all recognize that sales of commercial and residential real estate are daily occurrences. Typically, the title transfer occurs unremarkably regardless if it is business real estate or a house. The same applies to the transition of insurance. The seller insures the property up to the closing.  Upon closing, the buyer insures the property.

Now, let’s assume that one of two events take place or has taken place:

Then what?  Either 1) You have incurred an insured event and now you decide you want to sell your property while your claim is pending; or 2) In the midst of selling your property, an insurance claim occurs.

The key principle in play supports that a loss should not hold up the sale or transfer of property. In fact, the insurance company cannot hold up sale and transfer just because there is a claim pending.

Please be wary of insurers which try to delay or deny altogether the payout of claims when properties with “live” claims are subject to a sale. The maneuver is just part of the insurance company’s own agenda to avoid paying the max of what is rightfully due in a timely manner.

Assignment of the Claim:

There are several scenarios that can occur depending on the language in the purchase agreement. One such scenario involves the seller assigning part or all of the claim to the purchaser. Every insurance policy has some version of an “anti-assignment” clause. That clause simply means that the policy itself cannot be assigned without the insurer’s consent, but a post-loss claim is absolutely assignable, notwithstanding the clause.

Factor in these possibilities.

First, let’s assume the purchase agreement  does not assign  the insurance claim. In such an instance, only the seller could bring a claim for loss or damages under the policy that was in place at the time of the damage,as the buyer would not have standing to bring a claim as it did and does not have an insurable interest. In such an instance, assuming no assignment, a seller would typically reduce its purchase price by the amount of the claim that it stood to recover, in order to put the buyer in the same stead that it would have been had no loss occurred.

Now, let’s assume that the seller  did assign  the claim to the buyer, the buyer would have the right, per the assignment, to collect the proceeds of the claim and make the repairs. In such a case, the sales price would remain as was in the contract for sale.

In both scenarios above, the insurer does not escape any indemnity, which is appropriate.

The Replacement Cost Claim:

Ok, now let’s change the scenario to assume the insured seller already collected the actual cash value under the policy (defined differently in different states, but let’s go with the predominant definition: “replacement cost minus depreciation”) and then sold/transferred the property to a buyer.

Is either the seller or buyer entitled to make a claim for the withheld depreciation (the repair or replacement cost of the property) from the insurance company? The answer, in short, is “Yes,” when the property has been repaired or replaced. But who is entitled to make the claim? Again, that depends on the language in the purchase agreement. If the claim has been assigned, then the buyer would be able to repair or replace the property, and make a claim for the withheld depreciation under the seller’s original policy.

But what if there was no assignment of claim. Can an insured who has already transferred a property make a claim for withheld depreciation, literally, on a property that they no longer own?

That question was addressed several years ago by the Seventh Circuit Court of Appeals in  Edgewood Manor Apartment Hoes, LLC v. RSUI Indemnity Co.,  733 F.3d 761  (7th Cir. 2013). There, the court determined an insured, whose property had been damaged by a storm, could sell the unrepaired property and maintain a claim for replacement cost proceeds.

Without going into any meaningful depth on the court’s reasoning, the insurer paid the actual cash value of the loss caused by Hurricane Katrina to the insured and began negotiating the replacement cost coverage. During those negotiations, the insured sold the property. Following the sale, the buyer repaired the property and eventually both the seller and the buyer sued the insurer for the replacement cost. Both the trial court and the circuit court agreed that, absent an assignment of the claim, the buyer lacked standing to sue.

The question remained: Could a seller still recover the withheld depreciation/replacement cost proceeds?

The insurer argued it had no obligation to pay because the seller sold the property in an unrepaired state, did not incur any expenses to repair the property and it had lost its insurable interest after the sale. The trial court agreed with the insurer and dismissed the claim.

The seller appealed, arguing its right to recover survived the transfer of the property and the policy did not require it to make the repairs to the property, only that repairs be made. The Seventh Circuit agreed, ruling Mississippi law only requires an insurable interest in the property at the time of the contract formation, i.e. when the policy was issued and did not require the insured to maintain the interest while a claim is being negotiated, settled or throughout litigation.

But what about the fact that the seller didn’t even make the repairs?

The Seventh Circuit held that the insurance policy did not require the insured to have made the repairs itself, only that repairs be made. The court stated that replacement cost insurance is A) supposed to be more than an indemnity policy, B) is designed to put the insured in a better position than before the loss (and charging a commensurate premium for this benefit) by compensating the insured for depreciation, and C) that if the insurer intended a “repair it yourself” requirement, it could have drafted the policy language thusly.

In  Edgewood Manor,  the court held that the seller/insured had an insurable interest in the property both when it procured the policy and at the time of the loss, satisfying any legal requirement for standing. Again, the options that the seller has are: A) take a reduced sales price based on the damage and collect the RCV; or B) take a full sale price (as if the property was not damaged) and provide an assignment of the claim to the buyer.

Code Upgrades

As a note, there may be one area where failure to provide an assignment of a claim could result in the cutoff of payment to a non-repairing seller. That is in respect to code upgrades. Typically, code upgrades are only required to be paid by the insurer, in the amount incurred, when incurred.

If there has been no assignment of claim, but the buyer who has taken ownership and possession of the property makes the code upgrades, the buyer would not likely have standing to recover from the insurer (inasmuch as there has not been an assignment) and the seller would also not likely be able to recover from the insurer (as they did not actually incur the cost of code upgrade).

In such a circumstance where a buyer is likely to have to repair, including making code upgrades, the real estate transaction should assign the buyer the claim, so the code upgrades can be recovered. No sales price alteration need be made, however.

Summarizing, don’t let the carrier tell you that you are caught in a “Catch-22” when there is a claim during the sales of real estate. Recovery by either the seller or buyer, depending on the agreement, is viable. And the sales price may or may not have to be adjusted so that both sides are in the position they thought they would be in absent an insured event. Certainly, public insurance claims adjusters, such as the Alex N. Sill Company, can help smooth the way through a claim if this issue should arise.

Contact a Sill public adjuster near you  for help maximizing your business or residential property damage insurance claim.

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Assignment of Claim after a Loss: What Homeowners Should Know

Let’s start with the basics. If you, as a homeowner, sustain property damage or losses because of a covered event (like a fire, for example), you will need your home repaired. You choose a contractor or restoration company to do the work – but the check from the insurance company has not come through yet, and you need them to start right away. So, what can you do?

You can sign an “assignment of claim,” which assigns your rights (as the policyholder) to benefits and proceeds from the loss, to the company or contractors. In the simplest of terms, the assignment of claim allows your contractor to get paid directly from the insurance company.

What is the anti-transfer clause in insurance?

However, many contractors and purchasers of the damaged property have found themselves in a tight spot over the years, because of something called the anti-transfer clause. As explained on the Tennessee Insurance Litigation Blog ,  the anti-transfer clause usually reads something like this: “Your rights and duties under this policy may not be transferred without our written consent except in the case of death of an individual named insured.” Sometimes, the insurance company requires written consent before an assignment of claim can be made.

This clause routinely allows insurers to deny payments to contractors – but it shouldn’t, when an assignment of claim is made post-loss.

What’s the difference between pre-loss vs. post-loss assignments?

The Courts of Tennessee have routinely ruled on behalf of contractors and purchasers who were assigned the claim after the loss occurred. That is because the original assignee – the homeowner – was approved by the insurance company in the first place, and because the damage occurred regardless. There was no additional risk for the insurance company. Therefore, even if the contractor has a long and storied history of rule-breaking (or even criminal activity), the homeowner can assign the claim however he or she chooses; after all, the loss already happened.

Where insurance companies can (and do) have a leg up is for pre-loss assignments. The insurance company underwrote the risk on Bob and Jane Homeowner because it felt confident enough to do so. Bob and Jane cannot assign their policy to another person without the approval of the insurer, even when no loss has occurred.

Even if there is an anti-transfer clause in your policy, the chances are very good that a post-loss assignment cannot be legally denied by your insurer. If it is, seek out an experienced insurance dispute lawyer to help you argue the denial.

One last note for Tennessee policyholders

In some cases, the insurance company may decide that the amount of your loss is worth less than the cost of the renovations for which the contractor is charging. If this happens, you could be on the hook for the remainder of the costs, depending, of course, on the language of the deal with your contractor.

Because of this risk, it’s wise to contact an attorney before making any decisions. Get informed about your rights from the start, and let your lawyer address any potential hiccups along the way. If your insurer lowballs your claim, your attorney can  handle the dispute , to ensure that you are compensated fairly.

At McWherter Scott & Bobbitt, we have spent years fighting against unfair insurance claims policies in Tennessee and Mississippi. Let  Brandon McWherter ,  Jonathan Bobbitt  and  Clint Scott   put their knowledge and experience to work for you. Please call  731-664-1340 or fill out our  contact form . We maintain offices in Nashville, Chattanooga, Memphis, Jackson and Knoxville.

Brandon McWherter has dedicated his practice to assisting insurance policyholders with their claims against insurance companies, including claims for bad faith. He is licensed in Tennessee, Arkansas, and Mississippi. Learn More

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Can You Assign Your Insurance Benefits to Someone Else?

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Most business insurance policies contain a so-called anti-assignment clause. This clause prohibits policyholders from transferring any of their rights under the policy to someone else. This means that the insured business cannot cede its right to collect claim payments to another party. However, laws in most states permit policyholders to transfer their rights to another party under certain circumstances.

Anti-Assignment Clause

In the standard ISO policies , the anti-assignment clause is located in a separate form called the Common Policy Conditions. These conditions apply to all coverages that are included in the policy. For instance, if a policy includes business auto , general liability , and commercial property coverages, the anti-assignment clause applies to all three coverages.

The clause is entitled Transfer of Your Rights and Duties Under This Policy. It includes the following provision:

Your rights and duties under this policy may not be transferred without our written consent except in the case of death of an individual named insured.

The anti-assignment clause prohibits the  named insured from transferring any of its rights or obligations under the policy to someone else without the insurer's permission. The only exception is if the named insured is an individual (sole proprietor) and he or she dies. An assignment is permitted in this case because a sole proprietorship and the individual owner are one and the same. If the individual dies, the business cannot survive unless it is sold to someone else.

An anti-assignment clause is intended to prevent the insurer from unwittingly assuming risks it never intended to take on. Commercial insurers review business insurance applicants carefully. Before they issue policies, underwriters consider the knowledge and experience of a company's owners and managerial staff. If a business is sold to someone else, the new owners may not be as skilled or attentive as the previous ones. From the insurer's perspective, the new owners are an unknown risk.

Post-Loss Assignments Permitted

The anti-assignment clause doesn't distinguish between assignments made before a loss and those made afterward. Even so, courts in most states have allowed policyholders to assign their rights to another party after a loss has occurred. Pre-loss assignments are still prohibited. Here is an example of a post-loss assignment of insurance benefits.

Victor operates a restaurant called Vital Vittles out of a building he owns. Late one January night two water pipes in the building freeze. The pipes subsequently burst, causing considerable water damage to Victor's building. Victor is forced to close his restaurant until the repairs are completed.

Victor hires a water damage contractor called Rapid Restoration to repair the damage to his building. He tells the contractor that he needs the repairs done quickly as he is anxious to reopen his restaurant. The contractor says that the repairs can be expedited if Victor signs over his rights under the policy to Rapid Restoration. The contractor will then proceed with the repairs and negotiate a claim settlement with Vital Vittles' commercial property insurer. Victor agrees to the assignment and the contractor begins the repair work.

While Vital Vittles' commercial property policy contains an anti-assignment clause, Victor has assigned his rights to Rapid Restoration after a loss has occurred. Thus, in most states, Victor's insurer cannot reject the assignment (assuming post-loss assignments are permitted in Victor's state).

Problems With Assignments of Benefits

In recent years, assignment of benefits (AOB) agreements have been problematic in some states, particularly Florida. Unscrupulous contractors have preyed on unsuspecting homeowners and business owners who have suffered water damage . Some contractors work alone while others operate in cahoots with crooked lawyers. In either event, the contractor convinces the policyholder to assign his or her rights under the policy over to the contractor. The contractor then exaggerates the cost of the repairs and collects the inflated amount from the insurer. The policyholder is left with a large claim on his or her loss history. When the policy expires, the insurer may refuse to renew it.

In the previous example, Victor has assigned his rights under the policy to Rapid Restoration. Suppose that Rapid Restoration completes only half of the repair work on Victor's building. The actual cost is $15,000 but the contractor submits a bill to the insurer for $30,000. Alternatively, the contractor never submits a bill but sues the insurer for $30,000. In either case, the insurer may refuse to pay on the basis that the contractor has committed insurance fraud. Victor cannot intervene because he has signed his rights over to the contractor. If the contractor is unsuccessful in its lawsuit against the insurer, it may demand payment from Victor's company.

Avoiding Problems With AOBs

As a business owner, you can avoid problems associated with AOBs and unscrupulous contractors by taking the following steps:

• Report any loss or accident directly to your insurer (or your agent or broker ). Notify your insurer immediately. Don't allow a contractor to do the notification on your behalf.
• Take photos of the damage.
• Don't allow any contractor to begin work until an insurance adjuster has documented the damage
• Vet contractors thoroughly before hiring them. Make sure they are properly licensed. If your area has suffered a natural disaster, watch out for construction scams.
• Don't sign an AOB unless you have reviewed it carefully. If you don't understand it, ask your agent, insurer, or attorney for assistance.
• If your contractor won't do any work until you've signed an AOB, find another contractor.

AOBs in Health Insurance

Assignment of benefit agreements are common in health insurance. Patients are often asked to agree to such clauses before they receive treatment from a physician, hospital, or another healthcare provider. The assignment of benefits clause transfers a patient's right to collect benefits under his or her health policy to the provider. By signing the document, the patent agrees that payments will be made directly to the provider for the services rendered. The clause states that the patient is ultimately responsible for the charges if the insurer fails to pay.

Once the treatment has been performed, the provider submits the AOB along with a claim to the patient's health insurer. The insurer pays the provider for services rendered to the patient.

Assignment of insurance policies and claims | Practical Law

Assignment of insurance policies and claims

Practical law uk practice note w-031-6021  (approx. 19 pages).

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Real Property Sales With Open Insurance Claim: Avoiding Closing Delays, Assignment of Claims, Replacement Costs

Recording of a 90-minute premium CLE video webinar with Q&A

Conducted on Thursday, April 14, 2022

Recorded event now available

This CLE webinar will advise real estate counsel on how to proceed with closing during the pendency of an open insurance claim. The panel will guide counsel on the right to retain insurance benefits under the policy, assign them to the new buyer, and document both options properly. The panel will discuss best practices on proceeding with a claim and how an insured seller who has already collected the actual cash value under the policy can file a depreciation claim.

Description

Selling property during the pendency of an open insurance claim can raise many legal questions. The owner must determine whether it intends to retain the right to receive insurance benefits under the policy or assign them to the new buyer. Documentation of damages and necessary disclosures are part of the process counsel must assist to close the deal.

First and foremost, counsel needs to complete a seller's disclosure form to document unrepaired damage to the property to the buyer. Also, counsel must notify the buyer of open insurance claims, although this may affect the ability to get new insurance and affect the closing.

Once a buyer is ready to proceed, both parties must consider the options. Sellers have the right to assign insurance claims to the new buyer, but counsel will need to provide that documentation. Failure by the parties to convey their intent to transfer the right to receive benefits could render the assignment unenforceable and take away the buyer's standing to obtain the benefits owed in court.

Alternatively, the seller can maintain the insurance claim and sell the property for a reduced amount. Again, counsel must document in the sales documents the amount of price reduction that is allocated to the unrepaired damage. This will help establish a more exact estimate of the repair cost and substantiate the basis for the price reduction. Once again, a seller's disclosure form can show (1) the buyer was on notice of the damages at the time of the sale and (2) that the cost to repair was contemplated in the reduced sale price.

Listen as our expert panel addresses the best practices for closing a purchase with a pending insurance claim with expediency and clarity. The panel will discuss the most common issues and solutions when an available property is attached to a damage claim.

• Seller's disclosures
• Assignment of insurance claims
• Retention of insurance by seller
• Best practices

The panel will address these and other key issues:

• How does a pending insurance claim affect the sale of real estate?
• When assigning an insurance claim as part of a property sale, what are the buyer and seller concerns?
• If a seller maintains the insurance claim in a deal, what documentation is necessary and why?

Mr. Thompson has been practicing law for 31 years. He is a top-rated specialist in the field of policyholder-side insurance recovery, including claim analysis, negotiation, settlement, arbitration, and when needed, litigation. He has won many trials and settled dozens of cases. He has experience representing policyholders in all lines of insurance. Mr. Thompson has worked on dozens of major property and business interruption claims, including some of the largest in history arising from 9/11, hurricanes like Katrina, the California fires, and recently for Covid-19 losses. He also has decades of experience in the hospitality industry and construction matters on behalf of owners or managers, including relating to management agreements, loan agreements, construction defects, mold, pollution, legionella, personal liability, theft, and various commercial disputes (both insurance and other disputes).

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Post-Loss Assignments of Claims Under Insurance Policies

In the settlement of lawsuits involving insured claims, it is not uncommon that one condition of the settlement is that the defendant assign his or her claims under all applicable insurance policies to the party that filed suit.

Indeed, it is frequently the case that the defendant, particularly when the defendant is an individual, has a limited ability to pay a judgment and insurance coverage offers the best opportunity for a recovery by the suing party. Usually, such settlements are made without any serious thought being given to whether the defendant’s claim against its insurer is assignable; the assumption being that it is assignable.

However, insurance policies generally have anti-assignment clauses which prohibit the assignment of the policy, or an interest in the policy, without the insurer’s consent. These clauses come into play in determining the validity or enforceability of the assignment of a claim under an insurance policy and should be considered when such an assignment is part of a settlement.

When considering the enforceability of anti-assignment clauses in insurance policies, the courts generally draw a distinction between an assignment made prior to the occurrence of a covered loss (a “pre-loss” assignment) and an assignment made after the occurrence of a covered loss (a “post-loss” assignment).

In analyzing pre-loss assignments, the courts recognize that requiring an insurer to provide coverage to an assignee of its policy prior to the occurrence of a covered loss would place the insurer in the position of covering a party with whom it had not contracted nor been allowed to properly underwrite to assess the risks posed by that potential insured, and, accordingly, determine the appropriate premium to charge for the risks being undertaken or choose to decline coverage.

Post-loss assignments, on the other hand, take place after the insurer’s obligations under its policy have become fixed by the occurrence of a covered loss, thus the risk factors applicable to the assignee are irrelevant with regard to the covered loss in question. For these reasons, the majority of the courts enforce anti-assignment clauses to prohibit or restrict pre-loss assignments, but refuse to enforce anti-assignment clauses to prohibit or restrict post-loss assignments.

Katrina Cases

The Louisiana Supreme Court, which had not previously addressed the enforceability of anti-assignment clauses for post-loss assignments, was recently confronted with this issue in the In re: Katrina Canal Breaches Litigation, litigation involving consolidated cases arising out of Hurricane Katrina. The issue arose as a result of a lawsuit brought by the State of Louisiana as the assignee of claims under numerous insurance policies as part of the “Road Home” Program. The Road Home Program was set up following Hurricanes Katrina and Rita to distribute federal funds to homeowners suffering damage from the hurricanes. In return for receiving a grant of up to $150,000, homeowners were required to execute a Limited Subrogation/Assignment agreement, which provided in pertinent part:

Pursuant to these Limited Subrogation/Assignments, the State of Louisiana brought suit against more than 200 insurance companies to recover funds dispensed under the Road Home Program. The suit was removed to Federal Court under the Class Action Fairness Act and the insurers filed motions to dismiss, arguing that the assignments to the State of Louisiana were invalid under the anti-assignment clauses in the homeowner policies at issue.

On appeal, the United States Fifth Circuit Court of Appeals certified the following question to the Louisiana Supreme Court: “Does an anti-assignment clause in a homeowner’s insurance policy, which by its plain terms purports to bar any assignment of the policy or an interest therein without the insurer’s consent, bar an insured’s post-loss assignment of the insured’s claims under the policy when such an assignment transfers contractual obligations, not just the right to money due?”

In answering this question, the Louisiana Supreme Court began by noting that, as a general matter, contractual rights are assignable unless the law, the contract terms or the nature of the contract preclude assignment. Specific to the certified question, Louisiana Civil Code article 2653 provides that a right “cannot be assigned when the contract from which it arises prohibits the assignment of that right.” The Louisiana Supreme Court observed that the language of article 2653 is broad and, on its face, applies to all assignments, including post-loss assignments of insurance claims. The Court, therefore, construed the issue confronting it as whether Louisiana public policy would enforce an anti-assignment clause to preclude post-loss assignments of claims under insurance policies.

In addressing the public policy question, the Louisiana Supreme Court recognized the distinction between pre-loss assignments and post-loss assignments discussed by courts from other states and noted that the prevailing view was that anti-assignment clauses were invalid and/or unenforceable when applied to post-loss assignments. Notwithstanding this weight of authority, the Louisiana Supreme Court stated:

“[W]hile the Louisiana legislature has clearly indicated an intent to allow parties freedom to assign contractual rights, by enacting La. C.C. art. 2653, it has also clearly indicated an intent to allow parties freedom to contractually prohibit assignment of rights. We recognize the vast amount of national jurisprudence distinguishing between pre-loss and post-loss assignments and rejecting restrictions on post-loss assignments, however we find no public policy in Louisiana favoring assignability of claims over freedom of contract.”

Thus, Court refused to invalidate the enforceability of the anti-assignment clauses to the post-loss assignments before it based on public policy, adding that public policy determinations are better suited to the legislature.

Nonetheless, after having recognized the general enforceability of anti-assignment clauses to post-loss assignments, the Court immediately placed limits on when those clauses would be applicable, stating that to be applicable, they “must clearly and unambiguously express that the non-assignment clause applies to post-loss assignments.” The Court refused “to formulate a test consisting of specific terms or words,” which would satisfy this condition and remanded the case to the federal courts to determine whether the individual anti-assignment clauses in the various policies were sufficiently clear and explicit to be enforced with respect to post-loss assignments at issue.

A Broad Application

It should be noted that the Court’s opinion appears to apply broadly to all post-loss assignments irrespective of what specific rights are being assigned, despite the fact that the certified question was narrower and asked only about the applicability of a post-loss assignment where the assignment “transfers contractual obligations, not just the right to money due.”

In a footnote at the beginning of its opinion, the Louisiana Supreme Court observed that in certifying the question to it, the Fifth Circuit “disclaimed any intent” that the Court “confine its reply to the precise form or scope of the legal questions certified.” The footnote indicates that the Court’s opinion was not intended to be limited to only those post-loss assignments involving the assignment of contractual obligations.

Louisiana has departed from the majority view in holding that as a matter of general law, anti-assignment clauses are not inherently void with regard to post-loss assignments. However, it may be that in practical application, the results of individual cases may well be consistent with the majority rule of not enforcing anti-assignment clauses with regard to post-loss assignments because Louisiana courts may be reluctant to find that the anti-assignment clauses are sufficiently “clear and explicit” unless they specifically state that they apply to post-loss assignments, notwithstanding the Louisiana Supreme Court’s unwillingness to “formulate a test consisting of specific terms or words.”

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Insurance disputes sometimes arise out of transactions.  Those of you who are involved in transactions, including transactions arising out of insolvencies, might be interested in a cautionary tale from a recent Illinois appellate court case addressing the assignment of insurance policies as part of an asset purchase agreement.  This drafting lesson may help avoid future litigation.

In  The Premcor Refining Group Inc. v. ACE Insurance Company of Illinois , No. 5-18-0210, 2019 Ill. App. Unpub. LEXIS 1539 (Aug. 12, 2019), the purchaser of a refinery from a Chapter 11 debtor sought to obtain the benefits of all the insurance policies issued to the seller and its predecessors by various insurance companies to cover various environmental contamination lawsuits and proceedings.  The refinery was sold via an asset purchase agreement.  The question before the court was whether there was a valid assignment of all the insurance policies from seller to purchaser.

The court concluded that there was no valid assignment of all in the insurance policies in the asset purchase agreement, just the potential assignment of only those policies listed on a particular schedule.  The case was remanded to allow the purchaser to amend its complaint to address only those insurance policies scheduled.

The asset purchase agreement, in the section describing the assets purchased, provided that the purchaser would acquire, among other things, all right, title and interest of the seller in “all proceeds payable under any insurance policy covering the Purchased Assets by reason of any and all occurrences occurring prior to the Closings Date.”  In the section entitled Insurance, the agreement provided that any rights that the seller may have against their insurers with respect to the Purchased Assets shall at closing be assigned to the purchaser.

The court held that neither provision constituted a valid assignment of the rights of the seller under the relevant insurance policies.  The court pointed out that these sections of the asset purchase agreement did not mention liability insurance rights, but evidenced a promise to convey to the purchaser any proceeds from pending claims covering the purchased assets. The court opined that where a purported assignment does not specifically identify an insurance policy, and does not mention liability coverage at all, the subject of the assignment is not described with sufficient particularity to be a valid assignment of all the assignor’s rights under all of its past liability insurance policies.

The court referenced another case where an assignment was found valid by using language that clearly referenced the subject of the assigned liability policies.  In that case,  Illinois Tool Works, Inc. v. Commerce & Industry Insurance Co. , 2011 Ill. App. (1st) 093084 (Dec. 12, 2011), the purchase agreement sufficiently stated what was assigned:

“The benefits, including all rights to defense and indemnity coverage, under any and all policies of liability insurance issued to [Seller] prior to the closing Date . . . with respect to insurance coverage for accidents, occurrences, claims, suits, actions or proceedings arising from the operations, activities, or conduct of the [Seller’s] Business prior to the Closing Date; provided, however, that such benefits shall transfer to [Buyer] to the extent liabilities for such accidents, occurrences, claims, suits, actions, or proceedings are threatened against, transferred to, or otherwise imposed upon [Buyer].”

To avoid litigation over assignment of insurance policies in a corporate transaction requires that if the intent is to assign existing insurance coverage from seller to buyer, the assignment clauses in the purchase agreement must be crystal clear that the policies—not just the proceeds from the polices—are being assigned.  And to make it crystal clear specificity is necessary as to the policies (on a schedule) and what those policies are being assigned to cover should be made clear.

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Handling Assignment of Benefit (“AOB”) Claims in the Wake of Hurricanes Irma and Harvey

Overview | Blog Posts | First-Party Coverage | Timothy Engelbrecht , T. Nicholas Goanos , L. Andrew Watson | Related | Print | Share

Timothy Engelbrecht

Partner | First-Party Coverage , Extra-Contractual 813-281-1900 [email protected]

T. Nicholas Goanos

Partner | Extra-Contractual , Arson & Fraud , Casualty Defense Litigation , Third-Party Coverage , First-Party Coverage 704-940-9811  [email protected]

L. Andrew Watson

Partner | First-Party Coverage , Extra-Contractual , Casualty Defense Litigation , Arson & Fraud , Third-Party Coverage 704-543-2321 [email protected]

September 12, 2017

Hurricanes Irma and Harvey have damaged large areas of Florida, Texas, and Louisiana, as well as brought heavy rain and wind to Georgia, North Carolina, and South Carolina. As insurers handle thousands of property damage claims in these areas, they will undoubtedly be presented with claims that have been assigned from insureds to damage-repair contractors. These are often referred to as assignments of benefits or “AOB” claims. This article explains briefly what an AOB claim is, how Florida, Texas, Louisiana, Georgia, North Carolina, and South Carolina address AOB claims, and the best practices for handling AOB claims.

WHAT IS AN AOB CLAIM?

The classic example of an AOB claim is the following: an insured suffers property damage and hires a repair contractor to repair that damage. The repair contractor requires the insured to execute a written document, usually entitled “Assignment of Insurance Benefits”, which says something to the effect of “for and in consideration of the contractor’s agreement to protect the property from further damage and/or make repairs, the insured assigns his/her/its insurance benefits to the contractor.” The contractor thereafter makes a claim directly to the insurer using the AOB.

HOW DOES FLORIDA, TEXAS, LOUISIANA, GEORGIA, NORTH CAROLINA, AND SOUTH CAROLINA ADDRESS AOB CLAIMS?

Florida  has allowed AOB claims for over 100 years. Sec. First Ins. Co. v. State, Office of Ins. Regulation , 177 So. 3d 627, 628 (Fla. 1st DCA 2015). Post-loss property damage claims are freely assignable in Florida regardless of whether the insurer consents or not.   Start to Finish Restoration, LLC v. Homeowners Choice Prop. & Cas. Ins. Co. , 192 So. 3d 1275, 1276 (Fla. 2d DCA 2016). An insurance policy that has a “non-assignment” clause only bars the assignment of the entire insurance policy, not an assignment of a post-loss insurance claim. Bioscience West, Inc. v. Gulfstream Prop. & Cas. Ins. Co. , 185 So. 3d 638, 640-41 (Fla. 2d DCA 2016). 

Texas  has adopted the opposite approach to AOBs. The general rule in Texas is that an insured cannot assign an insurance claim if the insurance policy has a non-assignment clause. ARM Props. Mgmt. Group v. RSUI Indem . Co., 642 F.Supp.2d 592, 609-10 (W.D. Tex. 2009) relying on  Tex. Farmers Ins. Co. v. Gerdes , 880 S.W. 2d 215, 218 (Tex. App. 1994). This is true even if the non-assignment clause is general and broadly worded.

Louisiana  takes a hybrid approach to AOBs. Louisiana allows an insurer to place a clause in an insurance policy that prohibits post-loss assignments.   In re Katrina Canal Breaches Litig ., 63 So. 3d 955, 962-63 (La. 2011). However, in order for such a clause to be enforceable, the clause must clearly and unambiguously express that it applies to post-loss assignments.   Id . The general and a broadly worded non-assignment clause that has traditionally appeared in most insurance policies is not sufficient. Id. 

Georgia , much like many of the States above and across the Country, permits AOBs.  See Santiago v. Safeway Ins. Co. , 196 Ga. App. 480, 481, 396 S.E.2d 506, 608 (App. Ct. 1990). Unlike North Carolina and South Carolina, which are discussed below, an assignee in Georgia may pursue his own extra-contractual claim only after first establishing a breach of the insurance policy.  Southern Gen. Ins. Co. v. Holt , 262 Ga. 267, 416 S.E.2d 274, 276-77 (1992). Further, before pursuing an extra-contractual claim, an assignee (or insured) in Georgia must provide the insurer an opportunity to “cure” the alleged “bad faith”. See  Ga. Code Ann. § 33-4-6.

Lastly,  North Carolina  and  South Carolina  also allow AOBs. In upholding the validity of an assignment, courts in these States have ruled not only that assignments of benefits are indeed valid, but also, that they are governed by each State’s general contract law. See e.g., Alaimo Family Chiropractic v. Allstate Ins. Co. , 155 N.C. App. 194, 197, 574 S.E.2d 496, 498 (App. Ct. 2002);  Gray v. State Farm Auto. Ins. Co. , 327 S.C. 646, 491 S.E.2d 272 (App. Ct. 1997). The “rubber” meets the proverbial “road”, though, when an extra-contractual claim is alleged. In North Carolina and South Carolina, a plaintiff may assert an extra-contractual claim, even if the insurer has not breached the insurance policy. See  Tadlock Painting Co. v. Maryland Cas. Co. , 322 S.C. 498, 473 S.E.2d 52 (1996);  Kielbania v. Indian Harbor Ins. Co., 2012 WL 3957926 (M.D.N.C. 2012). However, an assignee is limited in the sense that it may pursue only his own extra-contractual claim, and not the assignors.  Horton v. New S. Ins. Co. , 122 N.C. App. 265, 268, 468 S.E.2d 856, 858 (1996);  Davis v. Liberty Mut. Ins. Co. , 2015 WL 6163243, at *4 (D.S.C. 2015).

WHAT ARE THE BEST PRACTICES FOR HANDLING AN AOB CLAIM?

First, as noted above, an adjuster needs to know if the state law where the AOB claim is being made allows for AOB claims. 

Second, assuming the state allows for AOB claims, the adjuster needs to carefully read what the actual AOB document says. They are not all the same. Some AOBs assign the entire claim. Other AOBs only assign part of the claim. For example, imagine an insured’s property is damaged by water. The insured needs the water extracted and the structure rebuilt. An AOB might assign both the water extraction and the rebuild claim to a single contractor. Or, the insured might execute one AOB to a water extraction contractor and a separate AOB to a different rebuild contractor. Or, an insured might execute an AOB to a water extraction contractor and the insured will retain the remaining rights to make the rebuild claim. If the AOB is unclear what – exactly – is being assigned, it is important for the adjuster to speak with the insured and the contractor to ensure everyone is on the same page.

Third, the adjuster should speak to the insured to gather information necessary to understand and adjust the assigned claim. In Florida, an adjuster likely cannot require a contractor to perform the insurance policy’s post-loss conditions of giving documents, executing a sworn statement in proof of loss, or appearing for an examination under oath. Shaw v. State Farm Fire & Cas. Co.,  37 So. 3d 329, 332-33 (Fla. 5th DCA 2010) disapproved on other grounds in  Nunez v. Geico Gen. Ins. Co. , 117 So. 3d 388 (Fla. 2013). However, the insured is still responsible for fulfilling those conditions even with regard to the assigned claim. Id. The insured’s failure to do so may bar the assigned claim. Id. 

Fourth, assuming payment will be made on the assigned claim, the adjuster should determine who will be listed on the settlement check. If there is a valid AOB, it may be improper to list the insured on the settlement check since the insured’s rights have been assigned to the contractor. Many AOBs will state that only the contractor be listed on the settlement check. However, it is good for an adjuster to confirm with the insured that the insured understands that he/she/it will not be listed on the settlement check. It is also important for the adjuster to correctly determine if a mortgagee needs to be listed on the settlement check. Situations vary depending on the nature of the work that the contractor is doing (damage prevention versus repair) and whether the work has been completed or is still to be done. The adjuster should discuss the situation with the insured, the contractor, and the mortgagee if the adjuster is at all unsure if the mortgagee needs to be on the settlement check.

Fifth, an adjuster should know whether an assigned claim can be resolved using the insurance policy’s appraisal provision. Appraisal can be an inexpensive and expedient way to resolve a claim. In Florida, an insurer usually can require a contractor with an assigned claim to go to appraisal if the insurance policy provides for the mandatory appraisal upon request.  Certified Priority Restoration v. State Farm Florida Ins. Co ., 191 So. 3d 961, 962 (Fla. 4th DCA 2016).

Insurers will continue to be presented with AOB claims in the wake of Hurricanes Irma and Harvey. We have been helping insurers and adjusters navigate the unique issues associated with AOB claims for many years. Please contact us if you have any questions or need assistance.

For any further questions, please contact Timothy Engelbrecht, T. Nicholas Goanos, or L. Andrew Watson.

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Introduction to Nationwide Travel Insurance

• Coverage Options
• How to Purchase and Manage Your Policy

Nationwide Customer Reviews and Claims Experience

Compare nationwide travel insurance.

• Why You Should Trust Us

Nationwide Travel Insurance Review 2024

Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate insurance products to write unbiased product reviews.

Nationwide Travel Insurance has been around close to 100 years after being founded in 1926. The Ohio-based company has many different products in the insurance and finance space, including coverage for trips. Nationwide Travel Insurance policies are available for single or multiple trips and can cover cruise trips too.

• Trip cancellation coverage of up to 100% of trip costs (for cruises) or up to $30,000 (for single-trip plans)
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Three cruise-specific plans to choose from
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Annual travel insurance plans available
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Strong trip cancellation coverage
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Cancel for any reason coverage available
• con icon Two crossed lines that form an 'X'. CFAR insurance not available with every single plan
• con icon Two crossed lines that form an 'X'. Medical coverage is lower than what some competitors offer

Nationwide Travel Insurance offers many of the standard benefits you might see with a travel insurance policy. This can include things like trip cancellation coverage, so you can recover pre-paid costs or trip interruption in the event your vacation is interrupted by an unexpected event. There's also baggage delay coverage and medical coverage.

• Cancel for any reason coverage available

Nationwide Travel Insurance is one of the leading names in insurance across various areas of coverage including life, auto, and travel insurance. Nationwide Travel Insurance's coverage is also as comprehensive as it is varied. It tops our list of the best travel insurance companies and best cruise travel insurance , also ranking among the best cheap travel insurance companies for the value it provides. With single trip, multi trip, and cruise-specific policies along with an abundance of riders, there's a good chance Nationwide Travel Insurance will have the coverage you're looking for.  That said, Nationwide Travel Insurance lacks some of the niche coverage that other companies can provide. For example, Nationwide Travel Insurance doesn't insure trips over 31-days long. Its annual travel insurance only applies to trips 30 days or under. Additionally, Nationwide Travel Insurance lacks specific adventure sports coverage. Ultimately, Nationwide Travel Insurance is the company to beat. If you're shopping for something a little more specific, use Nationwide Travel Insurance's quotes as your baseline as you search for something more tailored to your trip. 

Coverage Options from Nationwide

The travel insurance policies offered by Nationwide Travel Insurance are available to consumers and are divided up by the type of trip: single trip, multiple trips, or cruise coverage.

Single-trip travel insurance policies

Nationwide Travel Insurance offers two single-trip travel insurance policies: the Essential plan and the Prime plan.

As the name suggests, Nationwide Travel Insurance Essential travel insurance covers the basics. It offers some protection should anything happen ahead of your trip or while you're on your trip.

The Prime plan takes your coverage to the next level, with higher coverage limits and the option to add on the coveted cancel for any reason (CFAR) coverage at an extra cost.

Both plans include trip cancellation or interruption coverage in the event of terrorism in your destination city, travel assistance from Nationwide Travel Insurance at no additional charge, and refunds with a 10-day review period (except in Washington and New York). Note that for baggage and personal effects coverage, there is a $500 combined maximum limit for valuable items (see your policy's terms and conditions for details on what's considered valuable). It also covers damaged or lost sports equipment.

Here's how the two plans stack up in terms of coverage limits. For trip delay coverage, you'll be eligible for reimbursement for delays of six hours or more.

Annual and multi-trip travel insurance policies

If you're looking for travel insurance coverage for more than one trip and want to cover your partner and children, the Travel Pro Plan may be an affordable option. It's important to note that this policy only covers events after departure, not pre-departure events. This policy could be as low as $59 as of the time of writing.

The Travel Plus Plan is another multi-trip policy from Nationwide Travel Insurance that has flexible term limits for trip interruption and cancellation coverage, up to $10,000. This covers the gaps from the Travel Pro Plan, which only covers post-departure events. So if you needed to cancel the trip due to a covered illness or other reason, this is the plan for you.

If you want to increase the level of benefits for your after departure coverage, the Travel Pro Deluxe Plan does just that. It builds on the Travel Pro Plan, hence the name, and includes higher coverage limits for just $20 more.

All plans include the same travel assistance from Nationwide Travel Insurance that's included with the single-trip policies. Here's how the multiple-trip plans compare:

Cruise coverage

Nationwide Travel Insurance offers three cruise travel insurance plans.

If you're going on a short cruise or going for the first time, the Universal Cruise Plan may be a good starting point if you want added protection and to recoup nonrefundable costs. Just make sure that you qualify based on your state, as cruise coverage isn't available in all states.

If you're going on a longer cruise and want added coverage to protect your trip, the Choice Cruise plan is an option to consider. And if you're looking for the most benefits and go on many cruises, the Luxury Cruise plan offers the most coverage options.

All three policies can be refunded with a 10-day review period, except in Washington and New York.

Here's a comparison of the coverage you'll get with Nationwide Travel Insurance's three different cruise travel insurance policies:

Additional coverage options from Nationwide

Nationwide Travel Insurance has a number of additional coverage options that can add more protection to your policy but also add to the cost as well. These include:

• Financial default coverage , in the event your travel supplier ends up in default or bankruptcy. This is available with the Essential and Prime single-trip policies.
• Pre-existing condition waiver, which may offer coverage for pre-existing illnesses or diseases if certain conditions are met. This is available with the Essential and Prime single-trip policies.
• Accidental death and dismemberment, which can have limits of $5,000, $10,000, $25,000 or $50,000 depending on the plan. This is available with the Essential and Prime single-trip policies.
• Accidental death for flights only, which can have limits of $100,000, $250,000, or $500,000. This is available with the Essential and Prime single-trip policies.
• Rental car collision or loss coverage, in the event something happens to your rental car, you can add on this coverage for up to $25,000 or $35,000 depending on the plan.This is available with the Essential and Prime single-trip policies (except in Texas or New York).
• Cancel for any reason (CFAR) , which must be added to a policy and is available through the single-trip Prime Plan, the Choice Cruise Plan, and the Luxury Cruise Plan.

Nationwide Travel Insurance Cost

The premium you pay will depend on various factors, including the age of the travelers, destination, and total trip costs. The  average cost of travel insurance  is 4% to 8% of your travel costs.

After inputting some personal information, such as your age and state of residence, along with your trip details, like travel dates, destination, and trip costs, you'll get an instant quote for Nationwide Travel Insurance Insurance plans available for your trip. And from there, it's easy to compare each option based on your coverage needs and budget.

Now let's look at a few examples to estimate Nationwide Travel Insurance coverage costs.

As of 2024, a 23-year-old from Illinois taking a week-long, $3,000 budget trip to Italy would have the following travel insurance quotes:

• Essential: $89.55
• Prime: $129.19

Premiums for Nationwide Travel Insurance Insurance plans are between 3% and 4.3% of the trip's cost, well within the average cost of travel insurance.

Nationwide Travel Insurance insurance provides the following quotes for a 30-year-old traveler from California heading to Japan for two weeks on a $4,000 trip:

• Essential: $113.01
• Prime: $160.47

Once again, premiums for Nationwide Travel Insurance plans are between 2.8% and 4% of the trip's cost, within and below the expected range of travel insurance costs.

A Texas family consisting of two 40-year-old parents with a 10-year-old and 4-year-old on a two-week trip to Australia for $20,000:

• Essential: $571.62
• Prime: $801.94

Nationwide Travel Insurance plans cost between 2.8% and 4% of the trip's cost, below and within the average cost of travel insurance. 

A 65-year-old couple looking to escape New Jersey for Mexico for two weeks with a trip cost of $6,000 would have the following quotes:

• Essential: $248.56
• Prime: $352.44

Premiums for Nationwide Travel Insurance plans are between 4.1% and 5.9%, which is well the average cost for travel insurance. While its certainly more expensive than coverage for younger travelers, it's on the lower end of what travel insurance companies tend to quote for older travelers. 

Nationwide Annual Travel Insurance Cost

Quotes from Nationwide Travel Insurance's annual travel insurance plans don't actually change based on age or state. You'll get a base quote of $69, which will vary based on how much trip cancellation coverage you'd like to purchase. Prices range from $155 to $729

You can also select a Pro Delux upgrade, which will cost an additional $20.

How to Purchase and Manage Your Nationwide Policy

To purchase a Nationwide Travel Insurance travel insurance policy, you first need to obtain a quote from Nationwide Travel Insurance's website. You should be prepared to provide the following:

• Destination
• Departure date
• Return date
• State of Residence
• Total trip cost
• Initial trip payment date

When you select a plan, be sure to also take a moment and scroll through the optional add-ons, such as rental car coverage. 

How to File a Claim with Nationwide

If you purchased travel insurance through Nationwide Travel Insurance and need to file a claim, you can contact a Nationwide Travel Insurance representative. You have seven days from the start of the issue that caused loss to notify Nationwide Travel Insurance of your claim.

Claims through Nationwide Travel Insurance are handled by Co-ordinated Benefit Plans, LLC. You can use its claims portal or call a representative, based on your type of policy.

Single trip policy phone number: 888-490-7606

Annual plan policy phone number: 866-281-1017

Cruise policy phone number : 866-281-0334

Rather reach out via email? You can contact Nationwide Travel Insurance via [email protected] .

If you need to send documents via mail, the mailing address is:

Co-ordinated Benefit Plans, LLC

On Behalf of Nationwide Mutual Insurance

Company and Affiliated Companies

P.O. Box 26222 Tampa, FL 33623

Nationwide Travel Insurance refrains from promising a specific response time frame. However, customers have reported waiting several weeks before hearing any updates.

Since Nationwide Travel Insurance offers such a wide breadth of insurance types, it's difficult to separate its travel-specific customer reviews from reviews on its other products. It received an average of 1.16 stars out of five across over 340 reviews on its BBB page, though most customers are writing about experiences with Nationwide Travel Insurance's auto and health insurance.

On SquareMouth, a travel insurance-specific aggregator, Nationwide Travel Insurance has an average of 4.01 stars across 570 reviews. Reviewers reported unresponsive a claims team and long wait times. Additionally, while insurance companies often engage directly with customer reviews on SquareMouth, Nationwide Travel Insurance doesn't respond to customer reviews.

Learn more about how Nationwide Travel Insurance Travel Insurance compares against the competition. 

Nationwide Travel Insurance vs. Allianz Travel Insurance

Much like Nationwide Travel Insurance, Allianz Travel Insurance insurance offers many different types of insurance coverage. While the company may be most well known for auto insurance, it offers travel insurance as well and has eight options. Allianz Travel Insurance, a major player in the travel insurance space, has 10 options listed.

Allianz Travel Insurance may offer higher coverage limits for the policies offered and have a streamlined process for filing a claim online. Where Nationwide Travel Insurance wins out is the fact that you can add cancel for any reason (CFAR) for an added cost, whereas CFAR coverage isn't available when purchasing an online policy via Allianz Travel Insurance.

Read our Allianz Travel Insurance review here.

Nationwide Travel Insurance vs. John Hancock Travel Insurance

John Hancock Travel Insurance  is similar to Nationwide Travel Insurance in that it provides a wide range of insurance offerings and financial services. One of those offerings is travel insurance. John Hancock travel insurance offers travel insurance through Bronze, Silver, and Gold policies.

When comparing policies, the budget option may be slightly more affordable with Nationwide Travel Insurance. However, mid-tier and higher coverage options may be more affordable with John Hancock travel insurance. It depends on your policy, trip details, and age. One good thing is that you can add cancel for any reason (CFAR) coverage under all John Hancock travel insurance plan options.

Read our John Hancock Travel Insurance review here.

Nationwide vs. credit card travel coverage

Rewards credit cards come chock full of benefits for cardholders, some of which they might be unaware of. One such perk can be travel interruption or cancellation coverage as well as rental car coverage. Credit cards may have sufficient coverage for quick trips. However, if you want the peace of mind of having solid medical coverage or higher limits, going the traditional travel insurance route may be a better fit.

For frequent travelers, credit card travel protection may be appealing as the coverage is constant. If you're looking for a comparable travel insurance plan with more comprehensive coverage, some companies offer annual travel insurance.

You can find our guide on the best credit cards with travel insurance  here.

Nationwide Travel Insurance Frequently Asked Questions

Nationwide Travel Insurance's travel insurance offers very comprehensive coverage, including trip cancellation, interruption, medical emergencies, and baggage loss.

Yes, Nationwide Travel Insurance allows the purchase of travel insurance up to a day before your departure. It doesn't offer plans for trips already in progress.

Nationwide Travel Insurance covers COVID-19 like any other illness, covering trip cancellations with proof of a positive test and covering emergency medical expenses. 

Nationwide Travel Insurance single trip plans cover pre-existing conditions as long as you purchase the Essential plan within 10 days of your trip deposit and the Prime plan within 21 days of your trip deposit. The annual plan doesn't cover pre-existing conditions, with a 60-day look-back period. 

Nationwide Travel Insurance is known for its reliable customer service, wide range of coverage options, and the ability to tailor policies with various add-ons, setting them apart from many competitors.

Why You Should Trust Us: How We Reviewed Nationwide Travel Insurance

For our review of Nationwide Travel Insurance, we looked at the leading travel insurance providers and compared the amount of options provided, coverage limits, cost, customer service options, and flexibility.

Nationwide Travel Insurance is a top contender for cruise-related travel insurance policies and stands out for having cancel for any reason (CFAR) coverage, though it's not available with every policy and comes with an extra cost. To find the best travel insurance policy for you, review various providers and compare quotes before buying a policy.

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Post-loss Assignment of Claims in California

In a prior blog , I discussed the California Supreme Court’s decision in Fluor Corporation v. Superior Court , 1 regarding the post-loss assignment of insurance benefits. In Fluor , the California Supreme Court held that section 520 of California’s Insurance Code prohibits insurance companies from refusing to honor post-loss assignments of benefits, regardless of whether the assigned benefits (a) had accrued at the time of the assignment ( i.e ., constituted “Noncontingent Benefits”), or (b) had not yet accrued but could accrue if additional events occurred or additional conditions satisfied ( i.e. , constituted “Contingent Benefits”).

Within days of the California Supreme Court’s decision in Fluor , an affiliate of Hartford Accident & Indemnity Company, which was effectively the “losing” party in Fluor , relied on the decision in Fluor to obtain a victory in a (federal) District Court case that also concerned a post-loss assignment of rights pertaining to an insurance policy. In Hartford Casualty Insurance Company v. Fireman’s Fund Insurance Company , 2 Hartford Casualty sued Fireman’s Fund on its own behalf and as the assignee of three of Fireman’s policyholders. Hartford had issued a business liability policy to one of the Fireman’s policyholders, Herndon Partners. Herndon was owned by another of Fireman’s policyholders, Paul Owhadi. For its part, Fireman’s had issued (1) a homeowner’s policy to Mr. Owhadi, under which Herndon Partners was named as an additional insured, and (2) an excess liability policy to Mr. Owhadi and the third policyholder, Susan Owhadi.

Fireman’s excess policy contained exclusions for business activity, business property, and workers compensation. The Fireman’s Fund policies also contained a clause which stated, “Assignment of this policy or a claim will not be valid unless we give our written consent.” 3

All of the policies covered, or seemed to cover, the property on which a worker was electrocuted and died. At the time of the death, the property was owned solely by Herndon Partners. Hartford defended Herndon in the wrongful death lawsuit that followed but Fireman’s Fund denied coverage because Herndon was not a named insured under either of its policies. Fireman’s also raised the business exclusions in its excess policy as grounds for denying coverage under that policy.

After an $8.8 million judgment was entered against Herndon, all three of the policyholders assigned to Hartford, “claims against Fireman’s Fund related to the wrongful death lawsuit and the two Fireman’s Fund policies.” 4 Hartford then filed a complaint against Fireman’s Fund for indemnity, contribution, professional negligence, declaratory judgment, and reformation of the Fireman’s Fund policies. Specifically, Hartford alleged that Fireman’s Fund knew that the property was owned by Herndon and that it was a rental property. Therefore, according to Hartford, Fireman’s policies should be “reformed” to delete the business exclusions and name Herndon as an insured.

Fireman’s moved to dismiss the reformation claim alleging that Hartford lacked standing to bring that claim because (1) Fireman’s policies expressly prohibited the assignment of claims without its consent, and (2) the California Supreme Court’s decision in Fluor did not apply to the reformation claim because a reformation claim does not seek “defense or indemnification coverage.” 5

The District Court rejected Fireman’s arguments, holding that under section 520 of California’s Insurance Code and the California Supreme Court’s decision in Fluor , the clause in Fireman’s policies that prohibited assignments was void regarding post-loss assignments. 6 The District Court also held that section 520 “applies broadly” and protected Hartford’s cause of action for reformation. 7, 8

The decision in Hartford is significant to the degree it suggests that the courts in California may interpret and apply section 520 broadly to post-loss assignments that pertain to rights or benefits under an insurance policy, including legal rights and causes of action not set forth in the policy. While the decision in Hartford pertained specifically to liability policies, neither the language of section 520 nor any court decisions I have found appear to limit the statute’s application to liability policies.

Determining the validity of an assignment pertaining to an insurance claim or policy always begins with an analysis of the terms of both the policy and the assignment. Before making any major decisions concerning an assignment, policyholders should seek independent professional advice and, when applicable, obtain multiple bids or offers from prospective assignees or purchasers of the assigned rights. ____________ 1 Fluor Corp. v. Superior Court , 61 Cal.4th 1175, 354 P.3d 302 (Cal. 2015) . 2 Hartford Cas. Ins. Co. v. Fireman’s Fund Ins. Co. , 2015 WL 5168643 (N.D. Calif. Sept. 3, 2015) . 3 Id. , fn. 3 (emphasis added). 4 The decision in Hartford does not specify what claims were assigned or how they were described in the assignment. 5 According to the opinion in Hartford , the quoted language was drawn from the Fluor decision by Fireman’s Fund. Partly because that phrase is found in multiple locations in the Fluor decision, it is not clear which instance of the phrase Fireman’s Fund was referring to. However, I believe the quotation is from the Supreme Court’s closing paragraph in Fluor : “For the reasons set forth, Insurance Code 520 applies to third party liability insurance. Under that provision, after personal injury (or property damage) resulting in loss occurs within the time limits of the policy, an insurer is precluded from refusing to honor an insured’s assignment of the right to invoke defense or indemnification coverage regarding that loss. This result obtains even without consent by the insurer — and even though the dollar amount of the loss remains unknown or undetermined until established later by a judgment or approved settlement.” [Emphasis added.] 6 Id. , *4 (“Thus, under Insurance Code § 520, the clause prohibiting the assignment of claims against Fireman’s Fund is void”). 7 Id. (“Nothing in the text of Insurance Code § 520 limits its applicability to only claims involving ‘defense or indemnification.’”). 8 Section 520 states, in its entirety, “An agreement not to transfer the claim of the insured against the insurer after a loss has happened, is void if made before the loss.”

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