assignment in commercial insurance

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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.

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Assignment of Benefits for Contractors: Pros & Cons of Accepting an AOB

22 articles

Insurance , Restoration , Slow Payment

When a property owner files an insurance claim to cover a restoration or roofing project, the owner typically deals directly with the insurance company. They may not have the funds available to pay the contractor out of pocket, so they’re counting on that insurance check to cover the construction costs.

But insurance companies often drag their feet, and payments can take even longer than normal. Contractors often wish they could simply deal with the insurance company directly through an assignment of benefits. In some circumstances, an AOB can be an effective tool that helps contractors collect payment faster — but is it worth it?

In this article, we’ll explain what an assignment of benefits is, and how the process works. More importantly, we’ll look at the pros and cons for restoration and roofing contractors to help you decide if an AOB is worth it . 

What is an assignment of benefits? 

An assignment of benefits , or AOB, is an agreement to transfer insurance claim rights to a third party. It gives the assignee authority to file and negotiate a claim directly with the insurance company, without involvement from the property owner. 

An AOB also allows the insurer to pay the contractor directly instead of funneling funds through the customer. AOBs take the homeowner out of the claims equation.

Here’s an example: A property owner’s roof is damaged in a hurricane. The owner contacts a restoration company to repair the damage, and signs an AOB to transfer their insurance rights to the contractor. The contractor, now the assignee, negotiates the claim directly with the insurance company. The insurer will pay the claim by issuing a check for the repairs directly to the restoration contractor. 

Setting up an AOB

A property owner and contractor can set up an assignment of benefits in two steps: 

• The owner and the contractor sign an AOB agreement
• The contractor sends the AOB to the insurance company

Keep in mind that many states have their own laws about what the agreement can or should include .

For example, Florida’s assignment of benefits law contains relatively strict requirements when it comes to an assignment of benefits: 

• The AOB agreements need to be in writing. The agreement must contain a bolded disclosure notifying the customer that they are relinquishing certain rights under the homeowners policy. You can’t charge administrative fees or penalties if a homeowner decides to cancel the AOB. 
• The AOB must include an itemized, per-unit breakdown of the work you plan to do. The services can only involve how you plan to make repairs or restore the home’s damage or protect the property from any further harm. A copy must be provided to the insurance company. 
• A homeowner can rescind an AOB agreement within 14 days of signing, or within 30 days if no work has begun and no start date was listed for the work. If a start date is listed, the 30-day rule still applies if substantial progress has not been made on the job. 

Before signing an AOB agreement, make sure you understand the property owner’s insurance policy, and whether the project is likely to be covered.

Learn more: Navigating an insurance claim on a restoration project

Pros & cons for contractors

It’s smart to do a cost-benefit analysis on the practice of accepting AOBs. Listing pros and cons can help you make a logical assessment before deciding either way. 

Pro: Hiring a public adjuster

An insurance carrier’s claims adjuster will inspect property damage and arrive at a dollar figure calculated to cover the cost of repairs. Often, you might feel this adjuster may have overlooked some details that should factor into the estimate. 

If you encounter pushback from the insurer under these circumstances, a licensed, public adjuster may be warranted. These appraisers work for the homeowner, whose best interests you now represent as a result of the AOB. A public adjuster could help win the battle to complete the repairs properly. 

Pro: More control over payment

You may sink a considerable amount of time into preparing an estimate for a customer. You may even get green-lighted to order materials and get started. Once the ball starts rolling, you wouldn’t want a customer to back out on the deal. 

Klark Brown , Co-founder of The Alliance of Independent Restorers, concedes this might be one of the very situations in which an AOB construction agreement might help a contractor. “An AOB helps make sure the homeowner doesn’t take the insurance money and run,” says Brown.  

Pro: Build a better relationship with the homeowner

A homeowner suffers a substantial loss and it’s easy to understand why push and pull with an insurance company might be the last thing they want to undertake. They may desire to have another party act on their behalf. 

As an AOB recipient, the claims ball is now in your court. By taking some of the weight off a customer’s shoulders during a difficult period, it could help build good faith and further the relationship you strive to build with that client. 

Learn more : 8 Ways for Contractors to Build Trust With a Homeowner

Con: It confuses payment responsibilities

Even if you accept an AOB, the property owner still generally bears responsibility for making payment. If the insurance company is dragging their feet, a restoration contractor can still likely file a mechanics lien on the property .

A homeowner may think that by signing away their right to an insurance claim, they are also signing away their responsibility to pay for the restoration work. This typically isn’t true, and this expectation could set you up for a more contentious dispute down the line if there is a problem with the insurance claim. 

Con: Tighter margins

Insurance companies will want repairs made at the lowest cost possible. Just like you, carriers run a business and need to cut costs while boosting revenue. 

While some restoration contractors work directly with insurers and could get a steady stream of work from them, Brown emphasizes that you may be sacrificing your own margins. “Expect to accept work for less money than you’d charge independently,” he adds. 

The takeaway here suggests that any contractor accepting an AOB could subject themselves to the same bare-boned profit margins. 

Con: More administrative work

Among others, creating additional administrative busywork is another reason Brown recommends that you steer clear of accepting AOBs. You’re committing additional resources while agreeing to work for less money. 

“Administrative costs are a burden,” Brown states. Insurers may reduce and/or delay payments to help their own bottom lines. “Insurers will play the float with reserves and claims funds,” he added. So, AOBs can be detrimental to your business if you’re spending more while chasing payments. 

Con: Increase in average collection period

Every contractor should use some financial metrics to help gauge the health of the business . The average collection period for receivables measures the average time it takes you to get paid on your open accounts. 

Insurance companies aren’t known for paying claims quickly. If you do restoration work without accepting an AOB, you can often take action with the homeowner to get paid faster. When you’re depending on an insurance company to make your payment, rather than the owner, collection times will likely increase.

The literal and figurative bottom line is: If accepting assignment of benefits agreements increases the time it takes to get paid and costs you more in operational expense, these are both situations you want to avoid. 

Learn more: How to calculate your collection effectiveness 

AOBs and mechanics liens

A mechanics lien is hands down a contractor’s most effective tool to ensure they get paid for their work. Many types of restoration services are protected under lien laws in most states. But what happens to lien rights when a contractor accepts an assignment of benefits? 

An AOB generally won’t affect a contractor’s ability to file a mechanics lien on the property if they don’t receive payment. The homeowner is typically still responsible to pay for the improvements. This is especially true if the contract involves work that wasn’t covered by the insurance policy. 

However, make sure you know the laws in the state where your project is located. For example, Florida’s assignment of benefits law, perhaps the most restrictive in the country, appears to prohibit an AOB assignee from filing a lien. 

Florida AOB agreements are required to include language that waives the contractor’s rights to collect payment from the owner. The required statement takes it even further, stating that neither the contractor or any of their subs can file a mechanics lien on the owner’s property. 

On his website , Florida’s CFO says: “The third-party assignee and its subcontractors may not collect, or attempt to collect money from you, maintain any action of law against you, file a lien against your property or report you to a credit reporting agency.”

That sounds like a contractor assignee can’t file a lien if they aren’t paid . But, according to construction lawyer Alex Benarroche , it’s not so cut-and-dry.

“Florida’s AOB law has yet to be tested in court, and it’s possible that the no-lien provision would be invalid,” says Benarroche. “This is because Florida also prohibits no-lien clauses in a contract. It is not legal for a contractor to waive their right to file a lien via an agreement prior to performance.” 

Learn more about no-lien clauses and their enforceability state-by-state

Remember that every state treats AOBs differently, and conflicting laws can create additional risk. It’s important to consult with a construction lawyer in the project’s state before accepting an assignment of benefits. 

Best practices for contractors 

At the end of the day, there are advantages and disadvantages to accepting an assignment of benefits. While it’s possible in some circumstances that an AOB could help a contractor get paid faster, there are lots of other payment tools that are more effective and require less administrative costs. An AOB should never be the first option on the table . 

If you do decide to become an assignee to the property owner’s claim benefits, make sure you do your homework beforehand and adopt some best practices to effectively manage the assignment of benefits process. You’ll need to keep on top of the administrative details involved in drafting AOBs and schedule work in a timely manner to stay in compliance with the conditions of the agreement. 

Make sure you understand all the nuances of how insurance works when there’s a claim . You need to understand the owner’s policy and what it covers. Home insurance policy forms are basically standardized for easy comparisons in each state, so what you see with one company is what you get with all carriers. 

Since you’re now the point of contact for the insurance company, expect more phone calls and emails from both clients and the insurer . You’ll need to have a strategy to efficiently handle ramped-up communications since the frequency will increase. Keep homeowners and claims reps in the loop so you can build customer relationships and hopefully get paid faster by the insurer for your work.

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What Is a Collateral Assignment of Life Insurance?

Charlene Rhinehart is a CPA , CFE, chair of an Illinois CPA Society committee, and has a degree in accounting and finance from DePaul University.

A collateral assignment of life insurance is a conditional assignment appointing a lender as an assignee of a policy. Essentially, the lender has a claim to some or all of the death benefit until the loan is repaid. The death benefit is used as collateral for a loan.

The advantage to using a collateral assignee over naming the lender as a beneficiary is that you can specify that the lender is only entitled to a certain amount, namely the amount of the outstanding loan. That would allow your beneficiaries still be entitled to any remaining death benefit.

Lenders commonly require that life insurance serve as collateral for a business loan to guarantee repayment if the borrower dies or defaults. They may even require you to get a life insurance policy to be approved for a business loan.

Key Takeaways

• The borrower of a business loan using life insurance as collateral must be the policy owner, who may or may not be the insured.
• The collateral assignment helps you avoid naming a lender as a beneficiary.
• The collateral assignment may be against all or part of the policy's value.
• If any amount of the death benefit remains after the lender is paid, it is distributed to beneficiaries.
• Once the loan is fully repaid, the life insurance policy is no longer used as collateral.

How a Collateral Assignment of Life Insurance Works

Collateral assignments make sure the lender gets paid only what they are due. The borrower must be the owner of the policy, but they do not have to be the insured person. And the policy must remain current for the life of the loan, with the policy owner continuing to pay all premiums . You can use either term or whole life insurance policy as collateral, but the death benefit must meet the lender's terms.

A permanent life insurance policy with a cash value allows the lender access to the cash value to use as loan payment if the borrower defaults. Many lenders don't accept term life insurance policies as collateral because they do not accumulate cash value.

Alternately, the policy owner's access to the cash value is restricted to protect the collateral. If the loan is repaid before the borrower's death, the assignment is removed, and the lender is no longer the beneficiary of the death benefit.

Insurance companies must be notified of the collateral assignment of a policy. However, other than their obligation to meet the terms of the contract, they are not involved in the agreement.

Example of Collateral Assignment of Life Insurance

For example, say you have a business plan for a floral shop and need a $50,000 loan to get started. When you apply for the loan, the bank says you must have collateral in the form of a life insurance policy to back it up. You have a whole life insurance policy with a cash value of $65,000 and a death benefit of $300,000, which the bank accepts as collateral.

So, you then designate the bank as the policy's assignee until you repay the $50,000 loan. That way, the bank can ensure it will be repaid the funds it lent you, even if you died. In this case, because the cash value and death benefit is more than what you owe the lender, your beneficiaries would still inherit money.

Alternatives to Collateral Assignment of Life Insurance

Using a collateral assignment to secure a business loan can help you access the funds you need to start or grow your business. However, you would be at risk of losing your life insurance policy if you defaulted on the loan, meaning your beneficiaries may not receive the money you'd planned for them to inherit.

Consult with a financial advisor to discuss whether a collateral assignment or one of these alternatives may be most appropriate for your financial situation.

Life insurance loan (policy loan) : If you already have a life insurance policy with a cash value, you can likely borrow against it. Policy loans are not taxed and have less stringent requirements such as no credit or income checks. However, this option would not work if you do not already have a permanent life insurance policy because the cash value component takes time to build.

Surrendering your policy : You can also surrender your policy to access any cash value you've built up. However, your beneficiaries would no longer receive a death benefit.

Other loan types : Finally, you can apply for other loans, such as a personal loan, that do not require life insurance as collateral. You could use loans that rely on other types of collateral, such as a home equity loan that uses your home equity.

What Are the Benefits of Collateral Assignment of Life Insurance?

A collateral assignment of a life insurance policy may be required if you need a business loan. Lenders typically require life insurance as collateral for business loans because they guarantee repayment if the borrower dies. A policy with cash value can guarantee repayment if the borrower defaults.

What Kind of Life Insurance Can Be Used for Collateral?

You can typically use any type of life insurance policy as collateral for a business loan, depending on the lender's requirements. A permanent life insurance policy with a cash value allows the lender a source of funds to use if the borrower defaults. Some lenders may not accept term life insurance policies, which have no cash value. The lender will typically require the death benefit be a certain amount, depending on your loan size.

Is Collateral Assignment of Life Insurance Irrevocable?

A collateral assignment of life insurance is irrevocable. So, the policyholder may not use the cash value of a life insurance policy dedicated toward collateral for a loan until that loan has been repaid.

What is the Difference Between an Assignment and a Collateral Assignment?

With an absolute assignment , the entire ownership of the policy would be transferred to the assignee, or the lender. Then, the lender would be entitled to the full death benefit. With a collateral assignment, the lender is only entitled to the balance of the outstanding loan.

The Bottom Line

If you are applying for life insurance to secure your own business loan, remember you do not need to make the lender the beneficiary. Instead you can use a collateral assignment. Consult a financial advisor or insurance broker who can walk you through the process and explain its pros and cons as they apply to your situation.

Progressive. " Collateral Assignment of Life Insurance ."

Fidelity Life. " What Is a Collateral Assignment of a Life Insurance Policy? "

Kansas Legislative Research Department. " Collateral Assignment of Life Insurance Proceeds ."

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More From Forbes

Commercial property insurance trends and how to navigate the new market.

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Denise Perlman is President of National Business Insurance at Marsh McLennan Agency , a Marsh McLennan company.

As we continue through 2024, the property insurance market is showing slight signs of improvement. However, businesses still find themselves at a crossroads due to various factors. Commercial property stakeholders looking to become more resilient over the coming months will need to understand the major insurance market trends to navigate the industry's complexities during this unique time.

Trends Influencing Commercial Property Insurance Rates

My organization conducted an internal review of the property insurance market, which was published as the Marsh McLennan Agency’s 2024 Commercial Property Trends report. In it, we found that three significant trends may shape the property insurance landscape: increased losses driven by historically non-modeled secondary perils, rising reinsurance costs, and underinsured properties.

Non-Modeled Perils Impact On Rates

The rise in secondary catastrophe perils, such as flooding, hail, wind, freezing temperatures and others, with little predictability, has impacted property portfolios. Additionally, high-magnitude catastrophe losses, supply chain challenges and continued rising inflation further complicate the landscape.

These challenges may directly affect the cost of commercial property coverage and insurance, leading insurers to adopt a stricter risk appetite. Population growth in high-risk areas like coastlines and urban forests is becoming a major factor in loss trends.

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In our study, we found that those with significant exposures and sustained losses could anticipate significant rate increases ranging from 50% to 100%. This is a historical look back at our experience during Q4 2023. However, it’s not likely to change for organizations with significant catastrophe risk exposures coupled with sustained loss activity going through 2024.

Changes To Underwriting Practices

Despite the challenges, the market displays enhanced stability, marking the first time in six years. There is a modest growth in investment and capital , attributed to the increased market capacity and underwriting interest from carriers. However, this stabilization must align with the growing need for comprehensive property coverage and higher limits.

While rates may decrease, conservative underwriting practices will persist as a more sustainable norm is established. Even more, the exact frequency and severity of catastrophic storms and secondary perils throughout the year are unknown and could reverse any signs of improvement we are seeing.

Insurers have started to change their risk selection criteria, resulting in increased competition and urgency to quote new business for acceptable risks. In Q4 2023, rate increases averaged 11% for larger risks and even higher for accounts with loss history challenges or catastrophic exposure.

How To Effectively Navigate The Commercial Property Insurance Market

The combination of challenges and other obstacles affecting the market emphasizes the need to proactively reassess risk exposure and coverage expectations. In this evolving landscape, commercial policyholders can take several steps to navigate the property insurance market effectively.

1. Choose knowledgeable brokers and partners.

It is crucial to select brokers and partners who understand the market and its cycles. Strategic partners will go the extra mile by sharing industry knowledge and being transparent about current challenges. Finding the right industry specialization is critical when working with a partner, as they can help you overcome the challenges a more generalized broker might overlook.

When partnering with a broker, look for:

• A local presence supported by global experts.

• Broad market access.

• Innovative, actionable analytics and modeling capabilities.

• Industry-specific proprietary and bespoke products and solutions.

• Those with a holistic view of industry-specific emerging trends beyond insurance.

• Full engagement with industry associations.

• An understanding of compliance and regulatory concerns at the state and federal levels.

• Creative strategies to manage increasing costs.

• The ability to scale and grow with client needs.

• Risk control and claims advocacy industry expertise.

• A partner that provides options and doesn't use a "one size fits all" approach.

2. Craft Cohesive Underwriting Submissions

A grasp of the market and the current heightened level of underwriter scrutiny allows businesses and their brokers to convey their narratives effectively. Policyholders can increase their chances of securing favorable terms by presenting a compelling underwriting submission.

A quality submission:

• Is well-organized, is complete and has accurate data.

• Highlights of any and all superior risk attributes.

• Includes insights from site inspections.

• Provides a thorough explanation of the valuation methodology utilized and why it might be better than baseline assumptions.

• Includes a detailed loss history.

• Anticipates and addresses concerns, including program design issues.

• Foster strong relationships with insurers.

Every risk is unique, and direct business involvement can build trust and confidence with domestic and global insurance carriers. Establishing a strong relationship with insurers can lead to a better understanding of specific risk profiles. Get to know your underwriters well. Meet with them regularly, build strong relationships, and make them part of the team.

3. Implement A Seamless Go-to-market Timeline

Transparency should start long before the renewal process (at least a few months) and extend throughout the policy's life. This approach allows for more informed decisions and ensures that policyholders are well-prepared for any changes or challenges that may arise.

Ultimately, as the property insurance market in 2024 presents unique challenges, stakeholders must stay informed and proactive. Commercial policyholders can navigate this complex landscape and emerge more resilient by understanding the key market trends and implementing effective strategies. Choosing knowledgeable partners, fostering strong relationships with insurers, and exploring alternative options will be instrumental in mitigating risks and securing comprehensive coverage.

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Opinion | The overlooked crisis of escalating commercial…

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Opinion | The overlooked crisis of escalating commercial insurance rates in California

As California business owners grapple with rising operational costs, predatory labor codes, and the highest unemployment rate in the nation, there’s yet another challenge squeezing their budgets: skyrocketing commercial property insurance rates. Business owners are seeing their commercial property insurance rates double, triple, and, in some extreme cases in Southern California, increase by as much as 400 percent.

Why are insurance prices out of control? It’s a combination of bad luck and bad policy. California’s vulnerability to natural disasters like wildfires exacerbates the issue. But rising retail theft is also driving up costs, leaving businesses in a lurch.

I have heard their stories firsthand. Kerry Jablonski, President of Hydroform USA Inc., shared that her business was recently forced to pay three times more for building insurance compared to last year—with much less coverage. Mike Acevedo, who owns and manages multiple companies in the agriculture and commercial industries in California, shared that his businesses have suffered from a more than 400 percent increase in building and liability insurance costs.

The state has exacerbated these problems by initially refusing to let insurers price for the appropriate risk. Jamie Reid, chairman of the board at C3 Risk and Insurance Services, said  the state’s “not approving rate increases, so instead of selling at a loss, insurance companies are saying we’re not going to sell the product at all.” Thankfully, state regulators are attempting to fix their earlier errors to address soaring insurance premiums.

On the natural disaster front, a proposed solution by California’s insurance commissioner Ricardo Lara would require providers to write several policies in fire-prone areas. By distributing risk more evenly across a larger pool of insured properties, the plan would mitigate the financial impact on insurance companies when a natural disaster occurs. This promotes competition among insurers, as more companies writing policies in a given area would lead to more competitive pricing, driving down premium costs in the process.

Lara’s plan would also give insurers the ability to determine their rates based on future losses instead of solely relying on past data. By using forward-looking data, insurers can better assess the true risk of insuring properties, particularly in regions susceptible to wildfires. This can prevent drastic price spikes following catastrophic events, as insurers would no longer have to raise rates significantly to cover unexpected losses from such events.

When it comes to combating retail theft, tough-on-crime solutions are in the works.

In January, Governor Newsom met with community leaders to discuss rising retail theft in the state, including Oakland Metropolitan Chamber of Commerce President Barbara Leslie. Leslie warned of small businesses losing their insurance policies after dealing with several instances of retail theft and property crime, a surge that is partly fueled by homelessness and drug addiction.

In November, an initiative to improve this situation will be on the ballot. The Homelessness, Drug Addiction, and Theft Reduction Act , introduced by Californians for Safer Communities, would reform Proposition 47 by instituting stricter penalties for repeat offenders of certain crimes, including theft. By targeting repeat offenders—who contribute significantly to the overall crime rates—this act aims to deter persistent shoplifting.

The exponential rise in insurance premiums places California businesses at a severe competitive disadvantage—both locally and nationally. Hundreds  of businesses have already fled California, and according to a recent report, 67 percent  of employers want to move their headquarters out of the state.

California’s job creators need meaningful solutions today. The legislature should make tackling crime — and by extension, out-of-control insurance rates — a priority.

Tom Manzo is the president and founder of the California Business and Industrial Alliance.

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Soaring insurance costs could finally put a lid on home prices, real estate experts say

• The housing market has been brutal in recent years as prices keep rising. 
• While high mortgage rates didn't bring prices down, steep insurance costs could put a lid on further appreciation. 
• "You can see in the course of even a year or two, prices begin to respond because people are very sensitive to this."

When mortgage rates started to spike in 2022, the thinking was that higher borrowing costs would put a lid on prices, which had spiraled endlessly upward since the pandemic sparked a buying frenzy. 

That didn't quite happen, and home prices have kept climbing, so much so that a recent report from Zillow said would-be buyers need to earn 80% more than pre-pandemic to afford the median-priced home. 

But there's an under-the-radar factor that could soon pull down home prices nationally, real estate experts told Business Insider — soaring home insurance costs. 

Home insurance premiums, which surged 4.5% year-over-year in March alone, according to the FRED economic data , could be the last straw for home buyers amid a litany of rising costs. 

Insurance comparison platform Insurify said in a recent report that annual insurance rates skyrocketed 19.8% from 2021 to 2023, and the company forecasts another 6% surge in 2024, which would push the average annual rate to $2,522 by year-end.

Real estate experts said that though they aren't the top driver of home prices compared to mortgage rates or housing inventory, they still have the power to influence what buyers are willing to pay over the long term.  

A growing national burden for buyers

Daryl Fairweather, the chief economist at Redfin, said in an interview with Business Insider that rising insurance costs are especially severe in states like Florida , where climate disasters factor into the risk forecast, but they're rising all over the US. 

Related stories

"There are places all over the country that are gonna have their own climate issues," she said, while referring to Texas heat waves last summer , which she said are likely to be repeated this year, and the persistent smoke and wild fires plaguing the West Coast .

The insurance costs usually come as a surprise to home buyers in those areas, Fairweather added. 

"The problem is that most people don't go through the process of finding out how much insurance will cost until they've already made an offer on a home and they feel like they have to go through with it or they'll lose out on their earnest money if they back out," she said. 

Pressuring home prices

Danielle Hale, the chief economist at Realtor.com, told BI that lenders typically require various forms of insurance from buyers who take on a mortgage, and if the insurance costs are too high, it can disqualify the buyer from getting the loan. 

"As costs rise, the pool of buyers who can qualify for the mortgage is more limited, and the price of the home may need to fall in order for a buyer to be found," Hale said.

Jesse Keenan, a sustainable real estate and urban planning professor at Tulane University, said that homebuyers are very sensitive to the long-term operational costs of having insurance, and usually, the value of a home will decline if insurance is particularly costly. 

"So at the end of the day, it's buyers and sellers capitalizing risk," he said. "And they're coming to terms with what that risk may be."

He also noted that insurance markets are getting better at discovering and assessing risk, thanks to things like geospatial technologies and advanced computing. 

"The implications of that are that technology is helping companies price at a much more precise measure of risk, so with all that information, consumers are now saying, 'you know what, this is worth more, this is worth less.' And as a consequence, the value of properties that are shaped are shifting, mostly down," Keenan said. 

In some extreme cases, that sensitivity has already prompted home price repricing in locales with extremely high insurance premiums, such as Louisiana. 

"You can see in the course of even a year or two, prices begin to respond because people are very sensitive to this," he said. 

To Fairweather, it's more precise to say the rising insurance will make home values grow more slowly than they would have, as the robust demand still characterizes the current market. 

"In general, demand exceeds supply, even though homeownership has become so unaffordable. We take into account prices and mortgage rates and now rising insurance costs, but there's still people wanting to buy homes," she said.

Watch: Millions of homes could flood the US housing market thanks to boomers

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With extreme weather comes extreme insurance premiums for homeowners in disaster-prone states

By Khristopher J. Brooks

Edited By Anne Marie Lee

Updated on: May 10, 2024 / 5:28 PM EDT / CBS News

Keeping homeowners insurance has become an increasingly tough task for millions of Americans, particularly those who live in the growing number of areas around the country prone to natural disasters.

Major insurance companies, including Allstate and State Farm, have stopped renewing policies in extreme-weather states like California and Florida, forcing residents there to find another insurer at a higher premium. AAA last year also decided not to renew  some policies in Florida, a state that has seen an increase in powerful storms and coastal flooding. 

Homeowners depend on their insurance policies to help with the steep price of paying for damages to their property in the event of accidents and bad weather. But insurers say they're backing out of certain states because the chance of extreme damage from  flood, hurricane or fires makes it too expensive to insure residents. 

The remaining insurers, meanwhile, have  opted to increase their rates . Travelers Insurance, for example, got the OK from California state regulators this week to raise homeowners' rates an average 15.3%. The rate change will impact more than 320,000 Californians who have Travelers coverage now, according to documents the company filed with state regulators. 

Travelers said in the state filing that it sought to raise rates in part because of "changing climate conditions." 

"The approved adjustments to our California homeowners insurance rates are a necessary step toward aligning pricing to the risks that our customers are facing," the company told CBS MoneyWatch in an emailed statement. 

Americans pay an average $2,153 a year, or $209 a month, for homeowners insurance, according to insurance industry data provider Quadrant Information Services. Florida's average annual price leads the nation at $6,366 while Californians on average pay $1,452, according to Quadrant. 

But a homeowner's premium often increases after switching providers, Matthew Eby, the founder and CEO of First Street Foundation  told CBS News. After a homeowner gets dropped from their previous insurer, they typically discover their previous policy did not cover wildfire or flood damage, Eby added. 

"They go to find a new policy and find out that they've not been paying the right price," he said. "The new price that is commensurate with risk can be 2, 3 or even 4 times higher than what they've been paying previously."

To be sure, Californians and Floridians aren't the only ones facing homeowners insurance woes. A January survey from Deloitte found that homeowners in 19 other states — including Louisiana, South Carolina and Texas — are seeing "shrinking coverage options and skyrocketing costs of their residential insurance policies." 

Not all insurers are upping rates or leaving states, the Deloitte survey found. Some providers offer homeowners cheaper prices if they take steps to protect their home from disasters.

"Some private insurance carriers in Florida, for example, are offering discounts to policyholders that fortify their homes against hurricane-force winds by strengthening and securing roofs and shutters and reinforcing garage doors," the company said.

Khristopher J. Brooks is a reporter for CBS MoneyWatch. He previously worked as a reporter for the Omaha World-Herald, Newsday and the Florida Times-Union. His reporting primarily focuses on the U.S. housing market, the business of sports and bankruptcy.

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Moscow luxury cars rental service (car hire)

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Luxury Rent a Car Moscow is a intermediation company ALL IN 1.

We are fully licensed and insured. We do not lie to our insurance company or hide the fact that we're a vehicle rental company. It costs us more, but it means we'll be around for the long haul. There are no hidden fees, obscure taxes, or secret vehicles that we're keeping from you. You are seeing us as we are, and that's the way it should be.

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California sisters were offered $5,000 from insurance for storm damage. A jury awarded them $18 million

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Two San Bernardino sisters who sued their insurance company for failing to pay to repair flood damage on their home are now $18 million richer after a jury found in their favor and imposed emotional and punitive damages on the insurance company.

The $18-million verdict announced April 18 by a San Bernardino County jury was a far cry from the $5,000 an insurance adjuster had initially offered the women.

Jennifer Garnier’s and Angela Toft’s home in Piñon Hills was flooded by rainwater in February 2019. Muddy water damaged their home, including the heating and air conditioning ducts. The rainwater also damaged the electrical system in their prefabricated home, according to their attorney, Michael Hernandez.

The sisters estimated they needed more than $100,000 to fix the damage, but when they filed a claim with their insurance company, American Reliable, an insurance adjuster instead offered Garnier and Toft only $5,000, Hernandez said.

The sisters sued American Reliable in September 2020 for a breach of contract, claiming that the adjuster did not conduct a proper inspection of the home. The home was uninhabitable, according to their lawsuit, but Garnier and Toft continued to live there because they did not have anywhere else to go.

Arizona-based American Reliable and its parent company, Pennsylvania-based Global Indemnity Group, did not respond to requests for comment.

But in court filings, American Reliable argued that Garnier and Toft repeatedly delayed inspection of their home and, after they filed their lawsuit, they were slow to respond to requests made by the company’s legal team. The women also repeatedly asked for all communication from the insurance company to be made in writing, Hernandez said.

More than four years after they filed their claim, American Reliable said an oversight was made on their end and they offered the sisters $140,000 in October 2023, just a few months before the trial was slated to start. The company explained to Garnier and Toft that they learned about the sisters’ living conditions while deliberating the evidence in the trial, Hernandez said.

“We argued that they had known about those conditions for a long time, but they made the decision to pay my clients because they knew that they would be facing a jury,” Hernandez said.

Garnier and Toft moved ahead with the trial and received estimates to repair their home, but postponed repairs until after the trial was over, because they would be forced to relocate during construction, according to Hernandez.

After a six-week trial, a jury found in favor of the women and awarded them each $3 million for emotional damages. They were awarded $2 million in punitive damages from American Reliable and $10 million in punitive damages from Global Indemnity Group, according to court documents.

The verdict arrives during a tumultuous time in California as insurance companies flee the Golden State, claiming they are unable to provide insurance to homes under threat of wildfires and other natural disasters.

While climate-change-related liability coverage did not overtly factor into Garnier’s and Toft’s case, their home was damaged by floodwaters from a Southern California rainstorm. Forecasts show that climate change will exacerbate flooding in California in the coming years .

State Farm won’t renew 72,000 insurance policies in California, worsening the state’s insurance crisis

State Farm announced this week it will not renew 72,000 policies in California amid a tight insurance market.

March 23, 2024

In March, State Farm announced that it would not renew policies for 72,000 property owners across the state, citing high inflation, catastrophe exposure, reinsurance costs and the limitation of decades-old insurance regulations as reasons for scaling back policies.

The California Department of Insurance announced a new strategy in September to streamline the rate approval process for insurers in the homeowners, auto and other markets. That process was last changed in 1988.

More to Read

California exodus of home insurance companies continues

April 19, 2024

California’s home insurance crisis: What went wrong, how it can be fixed and what owners can do

March 29, 2024

Southern California Edison to pay $80 million over deadly 2017 Thomas fire

Feb. 26, 2024

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Nathan Solis is a Metro reporter covering breaking news at the Los Angeles Times. He previously worked for Courthouse News Service, where he wrote both breaking news and enterprise stories ranging from criminal justice to homelessness and politics. Before that, Solis was at the Redding Record Searchlight as a multimedia journalist, where he anchored coverage of the destructive 2017 fires in Northern California. Earlier in his career, he worked for Eastsider L.A.

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Financial Reporting and Analysis Software

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• Russian Entites Profiles

Russian Company OOO "GLOBUS"

Brief profile.

active Commercial

Facts to Consider

An encumbrance over the founders’ share is reported.

The founder of the organization has changed.

show 1 more significant fact

A significant amount of the taxes paid (352 mln. RUB.).

The organization has an auditor's opinion.

show 3 more positive facts

Complete Profile

• 1. General Information
• 2. Registration in the Russian Federation
• 3. Company's Activities
• 4. Legal Address
• 5. Owners, Founders of the Entity
• 6. OOO "GLOBUS" CEO
• 7. Entities Founded by Company
• 8. Number of Employees
• 9. Company Finance
• 10. Entities related to OOO "GLOBUS"
• 11. Timeline of key events
• 12. Latest Changes in the Unified State Register of Legal Entities (USRLE)

General Information

Full name of the organization: OBSHCHESTVO S OGRANICHENNOI OTVETSTVENNOSTIU "GLOBUS"

TIN: 5031075380

KPP: 505301001

PSRN: 1075031005565

Location: 144000, Moscow Oblast, Elektrostal, ul. Pervomaiskaia, 15 str. 3

Line of business: Production, transmission and distribution of steam and hot water; air conditioning (OKVED code 35.30)

Organization status: Commercial, active

Form of incorporation: Limited liability companies (code 12300 according to OKOPF)

Registration in the Russian Federation

The tax authority where the legal entity is registered: Mezhraionnaia inspektsiia Federalnoi nalogovoi sluzhby №6 po Moskovskoi oblasti (inspection code – 5031). The tax authority before 08/23/2021 – Inspektsiia Federalnoi nalogovoi sluzhby po g. Elektrostali Moskovskoi oblasti (code 5053).

Registration with the Pension Fund: registration number 060055023355 dated 26 November 2015.

Registration with the Social Insurance Fund: registration number 503100729150191 dated 25 November 2015.

Company's Activities

The main activity of the organization is Production, transmission and distribution of steam and hot water; air conditioning (OKVED code 35.30).

Additionally, the organization listed the following activities:

OOO "GLOBUS" holds license entitling to carry out the following activities:

Legal Address

OOO "GLOBUS" is registered at 144000, Moscow Oblast, Elektrostal, ul. Pervomaiskaia, 15 str. 3. ( show on a map )

No other organizations are listed at the current registered address.

Owners, Founders of the Entity

The founder of OOO "GLOBUS" is

Below are the former founders:

Subject to the entire chain of the current founders, the list of OOO "GLOBUS" ultimate founders is as follows:

OOO "GLOBUS" CEO

The head of the organization (a person who has the right to act on behalf of a legal entity without a power of attorney) since 16 May 2018 is general manager Koval Konstantin Leonidovich (TIN: 500105870510).

Also Koval Konstantin Leonidovich is a founder of OOO "EIUTSK 1" .

Previously the organization was managed by (general manager from 09/12/2014 until 05/16/2018 * ).

Entities Founded by Company

Previously the organization was listed as a founder in:

• AO "EIUTSK" (Moscow Oblast, Elektrostal; 51%; 181 million RUB) - until 12/07/2021
• OOO "CHISTYI GOROD" (Moscow Oblast, Elektrostal; 99.96%; 78.4 million RUB) - until 11/09/2018

Number of Employees

In 2023, the average number of employees of OOO "GLOBUS" was 272 people. This is 3 people less than in 2022.

Company Finance

The Authorized capital of OOO "GLOBUS" is 8.2 million RUB. This is significantly higher than the minimum authorized capital established by law for LTD (10 thousand RUB).

In 2023, the organization received the revenue of 1.7 billion RUB, which is 85.9 million RUB, or by 4.8 %, less than a year ago.

As of December 31, 2023, the organization's total assets were 2.1 billion RUB This is 7.1 million RUB (by 0.3 %) less than a year earlier.

The net assets of OOO "GLOBUS" as of 12/31/2023 totaled 473 million RUB.

The OOO "GLOBUS"’s operation in 2023 resulted in the profit of 64.1 million RUB. This is by 39 % more than in 2022.

The organization is not subject to special taxation regimes (operates under a common regime).

Information about the taxes and fees paid by the organization for 2022

The organization had no tax arrears as of 02/10/2024.

Entities related to OOO "GLOBUS"

Based on the data from the Unified State Register of Legal Entities, the following legal entities and people are directly or indirectly related to the organization.

Timeline of key events

• The new founder – OOO "TEPLOVAIA GENERATSIIA" .
• is no longer listed as the founder in the Unified State Register of Legal Entities.
• Rostov Veniamin Vladimirovich is no longer listed as the founder in the Unified State Register of Legal Entities.

Latest Changes in the Unified State Register of Legal Entities (USRLE)

• 03/28/2023 . Change of information about a legal entity contained in the Unified State Register of Legal Entities.
• 09/27/2022 . Change of information about a legal entity contained in the Unified State Register of Legal Entities.
• 08/23/2021 . Entering information about accounting with the tax authority.
• 04/09/2021 . Change of information about a legal entity contained in the Unified State Register of Legal Entities.
• 04/07/2021 . Change of information about a legal entity contained in the Unified State Register of Legal Entities.
• 12/25/2020 . Change of information about a legal entity contained in the Unified State Register of Legal Entities.
• 10/09/2020 . Change of information about a legal entity contained in the Unified State Register of Legal Entities.
• 03/08/2020 . Changes to the information contained in the Unified State Register of Legal Entities in connection with the renaming (resubordination) of address objects.
• 10/01/2019 . Submission by the licensing authority of information on the renewal of documents confirming the existence of a license (information on the renewal of a license).
• 12/28/2018 . Change of information about a legal entity contained in the Unified State Register of Legal Entities.

* The date of change in the Unified State Register of Legal Entities is shown (may be different from the actual date).

The data presented on this page have been obtained from official sources: the Unified State Register of Legal Entities (USRLE), the State Information Resource for Financial Statements, the website of the Federal Tax Service (FTS), the Ministry of Finance and the Federal State Statistics Service.

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635th Anti-Aircraft Missile Regiment

635-й зенитно-ракетный полк

Military Unit: 86646

Activated 1953 in Stepanshchino, Moscow Oblast - initially as the 1945th Anti-Aircraft Artillery Regiment for Special Use and from 1955 as the 635th Anti-Aircraft Missile Regiment for Special Use.

1953 to 1984 equipped with 60 S-25 (SA-1) launchers:

• Launch area: 55 15 43N, 38 32 13E (US designation: Moscow SAM site E14-1)
• Support area: 55 16 50N, 38 32 28E
• Guidance area: 55 16 31N, 38 30 38E

1984 converted to the S-300PT (SA-10) with three independent battalions:

• 1st independent Anti-Aircraft Missile Battalion (Bessonovo, Moscow Oblast) - 55 09 34N, 38 22 26E
• 2nd independent Anti-Aircraft Missile Battalion and HQ (Stepanshchino, Moscow Oblast) - 55 15 31N, 38 32 23E
• 3rd independent Anti-Aircraft Missile Battalion (Shcherbovo, Moscow Oblast) - 55 22 32N, 38 43 33E

Disbanded 1.5.98.

Subordination:

• 1st Special Air Defence Corps , 1953 - 1.6.88
• 86th Air Defence Division , 1.6.88 - 1.10.94
• 86th Air Defence Brigade , 1.10.94 - 1.10.95
• 86th Air Defence Division , 1.10.95 - 1.5.98