Curbing Abuses of Assignments of Benefits and Reaffirming Insureds’ Unique Right to Unilateral Attorney’s Fees
Certain providers have partnered with attorneys to create a profitable litigation arrangement. In this arrangement, a service provider agrees to make a repair potentially covered by an insurance policy in exchange for the insurance policyholder’s right to sue his insurer via an assignment of insurance policy benefits. These service providers are typically associated with home and auto repairs. The service provider then often uses that acquired right to force the insurer to pay grossly inflated costs or risk even higher litigation costs. While policyholders simply seek to be made whole for losses, service providers and their attorneys are likely motivated to increase scope of work and to maximize profit and litigation fees.