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HB 1628

Fire insurance; assignment of claims prohibited.

2025 Regular Session Introduced by Nadarius Clark and 4 co-sponsors

Virginia prohibits fire insurance policyholders from assigning claims to third parties, restricting who can collect insurance proceeds effective July 1, 2025.

Acts of Assembly Chapter text (CHAP0120)
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Bill Summary · HB 1628

Legislative bill overview

HB 1628 prohibits the assignment of fire insurance claims in Virginia, meaning policyholders cannot transfer their right to collect insurance proceeds to third parties. The bill became effective July 1, 2025, and applies to all fire insurance policies issued or renewed after that date.

Why is this important

This legislation directly affects how fire insurance claims are handled and who can legally collect insurance payouts. It impacts policyholders, contractors seeking assignment of proceeds for repairs, lenders requiring collateral protection, and the broader insurance marketplace by restricting common financial arrangements used in property restoration and mortgage lending.

Potential points of contention

  • Contractor and lender impacts: Restoration contractors and mortgage lenders frequently rely on assignment of insurance proceeds as a form of payment security and collateral protection; this ban may increase costs or change how repairs are financed
  • Consumer choice and flexibility: Restricting assignments limits policyholders' options to use insurance proceeds as currency for debt repayment or to simplify claim handling through authorized representatives
  • Fraud prevention versus restriction trade-off: While assignment prohibitions can reduce certain fraud schemes, critics may argue they're overly broad and don't address the actual problem (fraudulent claims) rather than the mechanism (assignment itself)

Compiled from official sources — confirm details with the bill’s official record.

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