Insurance Policy Anti-Assignment Clauses

Most people do not know what an anti-assignment clause in an insurance policy means.  This issue is discussed in a 2018, opinion from the 14th Court of Appeals.  The opinion is styled, Safeco Insurance Company of America v. Clear Vision Windshield Repair, LLC.

This case concerns anti-assignment clauses in insurance policies.  Clear Vision repaired chips in the windshields of Safeco’s insureds.  Safeco recently refused to pay invoices for the windshield repairs on four of Safeco’s insureds.  The insureds had assigned the claim to Clear Vision for payment and Safeco denied the payments relying on the anti-assignment clause in the policies at issue.

The trial court ruled in favor of Clear Vision and that ruing was upheld on appeal by this Court.

The evidence at trial showed that Safeco had historically paid 85% of the claims submitted by Clear Vision.  In the 15% of the claims Safeco had denied, none had been denied based on the anti-assignment clause in the insurance policy.  It is undisputed that Safeco did not consent in writing to any of the insured’s assignments.  It is also undisputed that Clear Vision did not contact Safeco seeking permission for an assignment of the insureds’ policy benefits.

Anti-assignment clauses are enforceable unless rendered ineffective by a statute or through the application of contract law.  Under contract law, a party may waive rights included in the contract for its benefit.  In particular, an anti-assignment clause in an insurance contract can be waived.

The elements of waiver include (1) an existing right, benefit, or advantage held by a party; (2) the party’s actual knowledge of its existence; and (3) the party’s actual
intent to relinquish that right, or intentional conduct inconsistent with claiming that right.  Safeco challenges the third element here.  Waiver generally is a question of fact to be resolved by the trier of fact.  A party’s silence or inaction for a period of time long enough to show an intention to yield the known right is enough to establish waiver.
This Court concluded that Safeco’s original decision to not pay Clear Vision’s invoice was because the invoice did not include sales tax.  The Court also found that there was evidence that Safeco’s delay in invoking the anti-assignment clause was unreasonable in that it had waited for six months before raising the anti-assignment clause as a defense.
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