Assignment of Benefits Post Loss—New Hampshire Looks To Policy Language

An article in the Insurance Journal, New Hampshire Body Shop Owner ‘Winging’ Own Case Beats State Farm in High Court, about an assignment of benefits (AOB) case caught my attention. State Farm’s attorneys lost to a non-lawyer in New Hampshire’s Supreme Court.¹ The dollar dispute was overwhelmed by the practical implications of the case. The article noted in part:

Collision repair shop owner Steve Piispanen didn’t hire an attorney because he considers them to be ‘not educated’ when it comes to insurance law.

He represented himself when he appealed a local judge’s decision to dismiss a $1,093.37 claim against State Farm Mutual Automobile Insurance Co. He wrote his own brief and personally appeared to make oral arguments before the New Hampshire Supreme Court.

Piispanen has no legal training. ‘Heck no,’ he said. ‘I just winged it.’

…

Piispanen filed a small claims complaint. State Farm argued that the policy issued to Meagher clearly states that any assignment of benefits is invalid unless State Farm approves the assignment. Circuit Court Judge James Gleason dismissed the claim without explaining the reason.

That didn’t end the fight. Piispanen is the third-generation owner of an auto body shop that was founded in 1928 by a Finnish immigrant. He said he regularly confers with other ‘like-minded’ auto body shop owners and knew that courts in other states have not looked favorably on insurance contracts that bar post-loss assignment-of-benefit claims.

He said State Farm had refused to pay for parts that clearly had to be replaced. For example, the insurer insisted that he install a halogen headlight rather than the LED headlight that was provided by the original equipment manufacturer, which cost $300 more. The insurer also refused to pay for calibration of the vehicle’s safety systems.

The New Hampshire Supreme Court looked at the State Farm policy language to make its determination:

We simply explain that, given the language of the anti-assignment clause, nothing in the policy prevents the insured from assigning his right — arising post-loss — to a resolution of the dispute with State Farm as to a fair and reasonable price. Any defense available to State Farm in an action filed by the insured — for example, that the claim cannot be maintained because of New Hampshire Administrative Rule, Ins 1002.17 — would be available to State Farm in an action filed by Keene Auto Body.

The obvious question is “why don’t the insurance companies change the policy language to unequivocally prevent post loss assignment of benefits?” I expect that they will. This victory may be short lived. I also expect that this trend will occur throughout the United States and that insurers will continue to fight assignment of policy proceeds with different policy language.

Thought For The Day

Stay focused and stay determined. Don’t look to anyone else to be your determination – have self-determination. It will take you very far.
—Justice Smith
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¹ Keene Auto Body v. State Farm Mut. Auto. Ins. Co., No. 2021-0156 (N.H. Nov. 15, 2022).