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An assignment of benefits can simplify the process of paying third parties after an accident or event that triggers your insurance coverage. Without this document, for example, your health insurance company would pay you directly, and you would then be responsible for paying your medical care providers.
With an assignment of benefits in place, however, the insurance company can pay the healthcare provider directly, often at a discounted rate. This means that you don’t have to worry about paying all of your doctor bills (aside from co-pays or coinsurance). It benefits everyone involved—your insurance company, the healthcare provider, and you.
Let’s consider another scenario of assigning benefits in Connecticut. Imagine that your home is damaged in a storm, and you notify your insurance company. After they assess the damage, you hire a contractor to repair your house. The contractor may ask you to sign an assignment of benefits form, which allows them to work directly with your insurance company for payment.
This eliminates the need for you to pay the contractor upfront and wait for reimbursement. Plus, if your insurance company refuses to pay or delays payment, the contractor can sue your insurance company directly—not you—making the process smoother.
Insurance contracts often specify whether benefits can be assigned. In most cases, benefits are assignable, but it’s not always the case. Typically, an assignment is valid if the loss has already occurred when the assignment is made.
For example, if your house is damaged by a storm, it’s okay to assign benefits to a contractor after the damage has happened. However, if you try to assign benefits before the damage occurs—such as if you suspect a storm is coming and prearrange to assign your benefits to a contractor—you could run into legal issues. Insurance companies often need to approve the assignment in advance if it’s before the damage takes place, as they want more control over the costs.
While an assignment of benefits can be convenient, it’s not without risks. For example, once you sign the assignment, the third party—such as the contractor or medical provider—has full control over dealing with your insurance company. If the provider inflates charges or engages in fraudulent billing, it could complicate the claims process. Additionally, if a dispute arises between the provider and your insurance company, you might still be pulled into the middle of it. Understanding the terms of the assignment is crucial to avoid unexpected issues or liability.
Before signing any assignment of benefits document, you should carefully review its terms. Ensure that the document does not allow the assignee to make excessive demands or take legal action against you directly. If possible, limit the scope of the assignment to only the services or repairs directly related to your claim. Consulting with an experienced personal injury attorney or insurance expert can help you avoid potential pitfalls. At Bert McDowell Injury Law, we can guide you through this process to ensure your rights are protected while simplifying your insurance claim.
Assignment of benefits is most common in health insurance cases related to personal injury claims. If someone asks you to sign an assignment of benefits, it’s important to fully understand the implications.
At Bert McDowell Injury Law, we can help review any assignment of benefits documents before you sign them, ensuring you understand your rights and obligations. As part of our case evaluation process, we’ll walk you through the details and help you make an informed decision.
If you’re considering signing an assignment of benefits or have been asked to sign one, get in touch with us for a FREE consultation. Call (475) 231-3274 or fill out the form to the right to get started.
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