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Allocation of benefits may be dead in Ohio | Property Insurance Law Team Blog



A recent federal appellate court appears to have closed all hopes of granting benefits in Ohio. 1 The case concerned the transfer of insurance claims after loss to a repair shop. The proprietor maintained anti-transfer language in the policy:

Under Ohio law, a transfer of contractual rights is generally invalid when "there is a clear contractual language prohibiting transfer." Pilkington N. Am., Inc. v. Travelers Cas. & Sour. Co. 861 N.E.2d 121, 128 (Ohio 2006). Here, the insurance contracts expressly blocked each assignment without State Farm's consent and State Farm did not agree to any of the assignments. Blue Ash objects that the court in Pilkington chose not to enforce the anti-assignment clause there, and argues that we should do the same here. But Pilkington differs from this case: there the transferor was a successor in the interest of a predecessor who had suffered a permanent loss before the succession and transfer. Here, on the other hand, the insured claimed to transfer their rights to a third party ̵

1; Blue Ash – and the amounts for their losses are in question. Suffice it to say that Pilkington's facts are discernible. The terms of the insurance contracts govern here.

Entrepreneurs in Ohio should carefully read the insurance policy to see if there is an anti-leasing clause. If one exists and there is a dispute about the amount owed, the policyholder must bring an action or otherwise force the question of the amount owed for the repairs.

Thought For The Day

Never spend your money before you has earned it.
—Thomas Jefferson
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1 Blue Ash Auto Body, Inc. v. State Farm Mut. Car. Ins. Co. no. 21-3365, 2021 WL 5755632 (6th ed. 3 Dec. 2021).


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