Assignment of Claim not Precluded by Policy’s Anti-Assignment Clause

    The Supreme Court of Maryland upheld the insured's assignment of a post-loss claim despite the policy's anti-assignment provision. In re Featherfall Restoration, LLC, 2025 Md. LEXIS 294 (Md. July 24, 2025). 

    The insureds purchased a "High Value' homeowners policy from Travelers Home and Marine Insurance Company for their residence. The policy included an anti-assignment clause: "Assignment of this policy will to be valid unless we give our written consent." 

    Three months after the policy expired, the insureds notified Travelers of damage to their roof that they contended resulted from a wind and hailstorm that occurred before the policy expired. The insureds hired Featherfall Restoration, LLC to repair their roof. 

    Travelers inspected the roof and found no signs of wind or hail damage, but instead observed signs of wear, tear, and deterioration of the roof shingles. Travelers therefore denied the claim. Featherfall emailed Travelers an "Assignment of Claim" form that had been executed by the insureds. Through this document, the insureds purported to "irrevocably transfer, assign, and set over onto Featherfall Restoration, LLC . . . any and all insurance rights, benefits, proceeds, and any causes of action under applicable insurance policies." Travelers refused to discuss the claim with Featherfall, citing the anti-assignment clause. Travelers contended that the anti-assignment clause invalidated any attempt by the insureds to assign their claim to Featherfall without Travelers' express written consent, which it had not given. 

    Featherfall filed a complaint with the Maryland Insurance Administration (the MIA), asking the MIA to compel Travelers to honor the Assignment. The MIA found that Travelers correctly refused to honor the Assignment because it was prohibited under the policy's anti-assignment clause. The MIA determined that the anti-assignment clause was enforceable regardless of whether assignments occurred pre-loss or post-loss. Both the circuit court and the appellate court held that anti-assignment clauses were enforceable under Maryland law regardless of whether the assignment was made pre-loss or post-loss. Featherfall appealed to the Maryland Supreme Court.

    Featherfall contended that the Assignment did not purport to assign the policy, but rather the rights associated with a specific claim that arose under the policy. Travelers countered that the anti-assignment clause applied to any right or claim under the policy to which Travelers had not consented. 

    The court differentiated between the policy and a "claim." "Claim" was used in the policy to refer to specific requests for coverage or payment for specific losses. For example, one policy provision read, "We may investigate and settle a claim or suit that we decide is appropriate." Here, the anti-assignment clause did not, by its terms, apply to post-loss claims for money under the policy.

    The Assignment document specifically noted it transferred only the insureds' rights to "the above mentioned claim" – identified by claim number and as a resulting loss that occurred on a specific date. The Assignment did not purport to transfer the policy itself, the ongoing contractual relationship with Travelers, or a future claim that might arise under the policy. Notwithstanding the Assignment, the insureds still had coverage under the policy for other losses. If a tree fell on their residence, the insureds could still pursue coverage under the policy. Therefore, the insureds did not assign their rights to coverage for any loss other than the specific loss for which they hired Featherfall.