Subcommittee approves bill to ban assignment-of-claim provisions in homeowner property insurance contracts

Delegate Keas Gamara presented HB 1628, a bill that would prohibit assignment-of-claim clauses in homeowner property insurance contracts so that homeowners retain the right to authorize payment and control repairs after a covered loss.

Nut graf: Proponents described the bill as a consumer-protection measure that preserves homeowner control over repairs and prevents contractors from collecting an insurance payment while delivering substandard work. Industry groups that helped draft the bill said they support it; the committee approved the measure 7-0.

Dave Valbo of Virginia Mutual Insurance Companies testified that the industry sponsored the bill and described the practical risk: a contractor who obtains an assignment can exclude the homeowner from recourse if the contractor performs poorly. He explained the bill would make any assignment of claims void as applied to homeowner property policies.

Delegate Keas Gamara gave a concrete example: a contractor might obtain a homeowner’s signature on an assignment of claim and later perform shoddy work while the homeowner has no contractual leverage. Karen Addison of Trailman Strategies (representing the American Property Casualty Insurance Association) and Joe Hudgins of the Independent Insurance Agents of Virginia testified in support.

The committee voted 7-0 to pass the bill. Supporters said it applies only to homeowner property insurance and includes language negotiated with interested legal counsel to clarify scope and avoid unintended effects.

Next steps: The bill will advance in the legislative process as reported by the subcommittee.