The Supreme Court docket of Maryland upheld the insured’s project of a post-loss declare regardless of the coverage’s anti-assignment provision. In re Featherfall Restoration, LLC, 2025 Md. LEXIS 294 (Md. July 24, 2025).
The insureds bought a “Excessive Worth’ householders coverage from Vacationers Residence and Marine Insurance coverage Firm for his or her residence. The coverage included an anti-assignment clause: “Project of this coverage will to be legitimate except we give our written consent.”
Three months after the coverage expired, the insureds notified Vacationers of injury to their roof that they contended resulted from a wind and hailstorm that occurred earlier than the coverage expired. The insureds employed Featherfall Restoration, LLC to restore their roof.
Vacationers inspected the roof and located no indicators of wind or hail injury, however as a substitute noticed indicators of wear and tear, tear, and deterioration of the roof shingles. Vacationers subsequently denied the declare. Featherfall emailed Vacationers an “Project of Declare” type that had been executed by the insureds. By way of this doc, the insureds presupposed to “irrevocably switch, assign, and set over onto Featherfall Restoration, LLC . . . any and all insurance coverage rights, advantages, proceeds, and any causes of motion below relevant insurance coverage insurance policies.” Vacationers refused to debate the declare with Featherfall, citing the anti-assignment clause. Vacationers contended that the anti-assignment clause invalidated any try by the insureds to assign their declare to Featherfall with out Vacationers’ categorical written consent, which it had not given.
Featherfall filed a grievance with the Maryland Insurance coverage Administration (the MIA), asking the MIA to compel Vacationers to honor the Project. The MIA discovered that Vacationers appropriately refused to honor the Project as a result of it was prohibited below the coverage’s anti-assignment clause. The MIA decided that the anti-assignment clause was enforceable no matter whether or not assignments occurred pre-loss or post-loss. Each the circuit courtroom and the appellate courtroom held that anti-assignment clauses had been enforceable below Maryland legislation no matter whether or not the project was made pre-loss or post-loss. Featherfall appealed to the Maryland Supreme Court docket.
Featherfall contended that the Project didn’t purport to assign the coverage, however reasonably the rights related to a particular declare that arose below the coverage. Vacationers countered that the anti-assignment clause utilized to any proper or declare below the coverage to which Vacationers had not consented.
The courtroom differentiated between the coverage and a “declare.” “Declare” was used within the coverage to confer with particular requests for protection or cost for particular losses. For instance, one coverage provision learn, “We could examine and settle a declare or go well with that we determine is acceptable.” Right here, the anti-assignment clause didn’t, by its phrases, apply to post-loss claims for cash below the coverage.
The Project doc particularly famous it transferred solely the insureds’ rights to “the above talked about declare” – recognized by declare quantity and as a ensuing loss that occurred on a particular date. The Project didn’t purport to switch the coverage itself, the continued contractual relationship with Vacationers, or a future declare that may come up below the coverage. However the Project, the insureds nonetheless had protection below the coverage for different losses. If a tree fell on their residence, the insureds might nonetheless pursue protection below the coverage. Due to this fact, the insureds didn’t assign their rights to protection for any loss apart from the precise loss for which they employed Featherfall.
