The Two Components of Assignment of Benefits

Assignment of benefits (AOBs) has been a controversial topic recently, as insurers allege some auto glass shops, primarily in Florida and Arizona as well as other states with a zero-deductible for auto glass, are committing fraud and entering litigation arbitrarily. Meanwhile, these auto glass shops claim they just want to get paid fairly.

However, AOBs include two components. The first is the assignment of payment, which permits the insurer to pay a third party directly for its performed services. There is little controversy surrounding the assignment of payments, as both insurers and auto glass shops agree that it is in the best interest of the insured.

The second component is the assignment of rights. Some insurers allege this is being used to charge unsuspecting insureds higher than customary rates, especially in zero deductible states. Many glass shop owners dispute this charge, alleging insurers are trying to artificially lower their payments to the shops for their work, especially if the shop has no pricing agreement with the insurer or its network.

The November-December issue of AGRR™ magazine explores this topic with an in-depth report.

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3 Responses to The Two Components of Assignment of Benefits

  1. Jerry says:

    The assignment of benefits or assignment of proceeds is a simple tool that obligates the insurer to pay the shop directly. While it puts the shop in the shoes of the insured, it gives the shop no more rights than the insured has, so where is the fraud element?
    The Insurance Companies regularly break the law by sending payment to my customers instead of my shop even though they are aware that I have an assignment (I NEVER send an invoice without a signed assignment) and they know that doing so is breaking the law. Why do they send payment to my customer? Because I refuse to join the networks or charge network pricing.
    Here’s a typical situation. We received a fax from a large insurer who will go unnamed, authorizing us to replace an aftermarket slider in their insureds pickup. We did the worked, submitted the bill along with the assignment of proceeds. Their third party provider asked for proof of purchase for the part installed which is silly, but I provided it. Then they told me I would have to show my cost. I refuse to do so, and have never done so in over 37 years. After a month I contacted the insurance company. They told me they have no way of knowing how to pay me if they don’t know what I paid for the part!!!! This same company pays me in full for RV windshields that are invoiced at a price easily 5-10 times higher than the back slider, and I have never shown my cost. Finally the claims rep told me he would have to send payment to the insured!!! I asked him how that was possible because he said they needed to know my cost in order to know what to pay. I also reminded him that I have an assignment, so he agreed that he couldn’t send payment to the customer. It’s been over 2 months and we haven’t been paid. This is one of hundreds of invoices that I have to battle over.

    • robert says:

      They know they can drag things out just to punish the shops that does not want to play the game. THEY WIN YOU LOOSE $$$. You play you loose $$$. It is sad but also above my paygrade. Good Luck

  2. Jerry says:

    The insurance adjuster just got back to me to let me know they are paying my invoice in full. He said they were able to determine the cost of the part (no surprise, I told them from the start that their third party administrator, the largest AG retailer in the USA, who wouldn’t pay me, already knew what the part costs.)
    He said that they determined they had to pay the entire invoice price because we hadn’t agreed ahead of time what the total price of the invoice would be!!! I guess that means they will pay me in full from now on??? Hardly.
    Finally, he told me that in the future they will not pay me if I don’t give them my cost.
    You can’t make this stuff up.

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