Assignment of Benefits
Definition
An assignment of benefits (AOB) is a legal document that transfers insurance policy benefits from the policyholder or claimant to a third party, typically a medical provider, repair company, or other service provider. By signing an AOB, the patient or insured authorizes their insurance benefits to be paid directly to the provider rather than to themselves.
How It’s Used in Personal Injury Cases
In personal injury cases, AOBs commonly allow medical providers to receive payment directly from auto insurance medical payments coverage or health insurance. When you sign an assignment of benefits at a doctor’s office or hospital, you authorize the insurance company to pay the provider directly rather than reimbursing you. This means the provider has secured payment rights and can pursue the insurance company directly if payment is denied or delayed.
Practical Example
After a car accident, David went to an orthopedic clinic for treatment. At check-in, he signed an assignment of benefits form directing his auto insurance medical payments coverage to pay the clinic directly. The clinic submitted bills to David’s auto insurer, which paid the clinic $5,000 under the med-pay coverage. Because of the AOB, David didn’t need to pay out-of-pocket and wait for reimbursement—the payment went straight to his provider.
Why It Matters to Your Case
Assignments of benefits can simplify medical bill payment during your injury claim by eliminating the need to pay providers upfront and seek reimbursement. However, signing an AOB also means the provider—not you—controls the payment relationship with the insurer. Understanding what you’re signing ensures you maintain appropriate control over your insurance benefits and settlement proceeds.
Key Takeaway
An assignment of benefits directs your insurance payments to go directly to your medical provider—this simplifies billing but transfers payment control from you to the provider.