6 ADJUSTINGTODAY.COM then itself collect RCV proceeds when the buyer completes the actual repairs. Of course, a more certain process for insurance collection might be through an assignment to the buyer, but a policyholder/seller has both options: (a) take a reduced sale price based on damage and collect RCV; or (b) take a full sale price (as if the property were not damaged) and provide an assignment to the buyer. Depending on the policy language, in the absence of an assignment, code upgrade costs are a possible exception to the rule that a sale does not cut off an insurance claim by the seller for incomplete repairs. In a typical policy, the code upgrade coverage section provides that such coverage is not available unless the damaged “property is repaired or replaced,” and the coverage is limited by the “actual cost incurred.” Under some policies, upon the sale of a property, the seller cannot claim recovery of what would have been the code upgrade costs if the property had not been sold and repairs proceeded. Such a claim can, however, be assigned and continue to be asserted. 3. Assignment of Claim The general rule is that an insurance claim can be assigned, even if a full policy cannot. This is the rule in statutes and cases around the country, including the Gulf Coast states, NewYork, and elsewhere.16 Most insurance policies contain an “anti-assignment” clause stating that the “policy” cannot be assigned absent insurer consent. Such an anti-assignment clause only applies to assignments of the policy made before a loss, not to claims made after a loss. The law in Florida is typical: After the occurrence of the event insured against, the claim to recover the loss may be effectively assigned by the insured, even without the consent of the insurer, so as to vest in the assignee the absolute right to the insurance, provided, of course, the insured himself had that right at the time when the loss was incurred, and the assignment itself was otherwise valid.17 The common explanation was repeated by the World Trade Center Properties court: “‘Before loss, the insurer is subjected to a risk which the insurer may exempt from assignability except upon its own But there is nothing about the sale of a property that provides an insurer with the opportunity to sidestep its payment obligations.
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