Insurance Company’s frequently place in their polices of insurance anti assignment clauses that prevent the assignment of insurance coverage without the insurance company’s written consent of the assignment.
The general rule is that the insurance company has a right to know who the owner of the property it is insuring is. The purpose of the clause is to protect the insurance company from an increase in risk and hazard by a change in ownership without the knowledge of the insurance company.
If the change in ownership did not increase the risk to insurance company, and they would have routinely approved the assignment, they should not be able to claim they suffered any prejudice from the late notice of the assignment.
If the new owner can show that the insurance company would have routinely approved the assignment when the only apparent reason for rejecting the assignment is the insurance claim under such circumstances the court’s may enforce the assignment providing coverage.
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