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The Nebraska Supreme Court ruled that a post-loss assignment of a claim under a homeowner’s policy is valid notwithstanding a lack of insurer consent.  Millard Gutter Co. v. Farm Bureau Prop. & Cas. Ins. Co., 295 Neb. 419 (Neb. 2016).

A homeowner retained Millard Gutter to repair roof damage caused by a storm.  Farm Bureau, which insured the home, stated that only part of the roof needed to be repaired, but Millard Gutter believed that the entire roof should be replaced.  The homeowner replaced the entire roof and then assigned “any and all claims or moneys due or to become due” under his insurance policy to Millard Gutter.  Millard Gutter sued Farm Bureau, seeking full payment of the roof repair.  Farm Bureau argued, among other things, that the assignment was invalid because it was made without the insurer’s consent.  A Nebraska trial court ruled in favor of Millard Gutter, and the Nebraska Supreme Court affirmed.

Farm Bureau’s policy expressly stated that the rights and duties under the policy “may not be assigned without our written consent” and that without such consent, “[n]o change of interest in this policy is effective.”  Notwithstanding this provision, the court held that an assignment made after a loss has occurred is valid and enforceable.  Noting that the majority of courts have held that anti-assignment clauses do not bar post-loss assignments, the court stated that the “record simply does not demonstrate any increased risk to Farm Bureau or other adverse consequence of the assignment.”  The court also relied on the absence of state statutory law barring post-loss assignments in the property insurance context.  As discussed in previous Alerts, courts have employed various standards and reached different conclusions as to whether an anti-assignment clause bars post-loss assignments made without insurer consent.  See April and February 2016 Alerts; September 2015 Alert.