The Nebraska Supreme Court recently opined that insureds may assign their interests in an insurance policy to others after a loss has occurred, despite a clause in the policy stating that such assignments would be considered invalid. In Millard Gutter Co. v. Farm Bureau Prop. & Cas. Ins. Co., the insureds assigned their interests in their homeowners policy to Millard Gutter Company, the company that repaired their roof after a storm. However, the insurance policy between the insureds and Farm Bureau prohibited assignments of "[a]ll rights and duties" without the insurer's consent. Millard Gutter Company sued Farm Bureau in court to recoup the amount for services it performed for the insureds. Farm Bureau resisted, alleging that Millard Gutter Company could not bring suit under the insurance policy because the assignment was prohibited by the language in the insurance policy.
On appeal, the Nebraska Supreme Court noted that it has not ruled upon the validity of a nonassignment clause in a homeowner’s insurance policy. It also examined other jurisdictions' jurisprudence, the majority of which follow the rule that clauses in insurance policies prohibiting assignments do not prevent an assignment after the loss occurred. Reasoning that the nonassignment clause does not protect the insurer from any risk after a loss has occurred, the court concluded that the postloss assignment of a claim under a homeowner's insurance policy is valid despite policy language stating that any assignment without an insurer's consent would be invalid. As a result, Millard Gutter Company was allowed to seek relief in court when Farm Bureau did not pay its claim.