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Bill

Bill

SB 6178

Prohibiting the post-loss assignment of benefits in property insurance.

2025-2026 Regular Session Introduced by Noel Frame and 2 co-sponsors

Prohibits property insurance policyholders from assigning claim benefits to third parties after losses, restricting a common contractor payment arrangement.

Executive session scheduled, but no action was taken in the House Committee on Consumer Protection & Business at 1:30 PM.
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Bill Summary · SB 6178

Legislative bill overview

SB 6178 prohibits property insurance policyholders from assigning their insurance benefits to third parties (such as contractors or repair companies) after a loss occurs. Currently, insureds can assign post-loss benefits to vendors who then collect payment directly from insurers. This bill would eliminate that practice.

Why is this important

Post-loss assignment restrictions affect how property damage claims are settled. Contractors and repair companies currently rely on direct assignment of benefits as a business model and payment guarantee. Prohibiting this practice could reshape the repair industry's financial dynamics, potentially increasing out-of-pocket costs for homeowners or requiring different payment arrangements with service providers.

Potential points of contention

  • Contractor impact: Repair companies and contractors may oppose this, as assignment of benefits provides payment security and reduces collection risk—eliminating it could increase their costs or limit their ability to service low-income customers.
  • Consumer choice: Policyholders currently use assignments for convenience and to avoid managing large claim payouts themselves; restricting this removes an option some find beneficial.
  • Insurer interests: While insurers may support reduced assignment complexity, they could face increased direct claims from homeowners or disputes over payment authority during the repair process.

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

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