Fire insurance; assignment of claims prohibited.
HB1628 amends Virginia insurance law to prohibit an insured person under a fire insurance policy, or a fire policy bundled with other coverages, from assigning or transferring the duties, rights, or benefits arising from a claim or covered loss to another person without the insurer’s written consent. The bill also makes any contract term that violates this rule void and unenforceable. In practical terms, it limits post-loss assignment of insurance claims in the fire insurance context unless the insurer agrees in writing.
The bill preserves two important exceptions. First, it does not stop an insured from authorizing payment to, or paying, a contractor, vendor, or other party for covered or potentially covered services, materials, or items. Second, it does not bar assignment of rights to pursue damages in a personal injury or tort matter arising from a settlement, verdict, or judgment that exceeds the insured’s liability coverage. The bill also specifies that the new rule applies to certain mutual and perpetual insurers, notwithstanding a separate statutory exemption.
The bill’s impact is to add a new section to Title 38.2 of the Code of Virginia governing fire insurance claims and to restrict assignment-of-benefits arrangements in that market. It affects policyholders, insurers, contractors, and claim-related assignees by limiting who can step into the insured’s shoes after a covered loss. It also clarifies that the prohibition is not a blanket ban on paying third parties for repair or remediation work, but rather a restriction on transferring claim rights and benefits without insurer consent.
The overall sentiment around the bill appears strongly favorable and largely noncontroversial. It advanced unanimously through subcommittee, committee, and both chambers, with no recorded dissenting votes. The voting history suggests broad bipartisan agreement that the measure was appropriate insurance regulation.
Because there were no committee transcripts provided, there is little direct evidence of debate or opposition. The main point of potential contention inherent in the bill is the restriction on assignment of insurance claims, which could be viewed as limiting policyholders’ flexibility and the ability of contractors or public adjusters to pursue payment directly. However, the unanimous votes indicate that any such concerns did not generate visible legislative opposition in the available record.
HB1628 adds a new section, § 38.2-2131, to the Virginia Code in Title 38.2 governing insurance. It prohibits assignment or transfer of an insured’s duties, rights, or benefits under a fire insurance policy, or a fire policy combined with other coverages, arising from a claim or covered loss unless the insurer gives written consent. Any contract term violating the section is void and unenforceable. The bill also expressly applies the rule to certain mutual assessment property and casualty insurers and mutual insurers/associations issuing perpetual insurance, notwithstanding a separate exemption statute.
The bill appears to have enjoyed broad, unanimous support throughout the legislative process. It was reported favorably in subcommittee and committee and passed both the House and Senate without any recorded negative votes. The vote pattern suggests the measure was viewed as a routine insurance-law clarification or consumer/market regulation rather than a controversial policy change.
No formal opposition is reflected in the available committee or floor records, and no transcripts were provided to identify specific arguments. The main substantive issue raised by the bill’s text is the restriction on assignment of fire insurance claims, which may concern policyholders, contractors, public adjusters, or assignees who rely on assignment-of-benefits arrangements to handle repairs or claims. The bill addresses some of that concern by preserving payment to third parties for covered services and by allowing certain tort-related assignments above liability limits, but the core limitation on transferring claim rights without insurer consent remains the central point of potential contention.