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Wisconsin Homeowners: New Assignment of Benefits Law

September 22, 2026

Effective December 1, 2026, a new Wisconsin law will place important restrictions on how contractors can use Assignment of Benefits (AOB) agreements following certain residential property losses. The changes are designed to help homeowners better understand what rights they may be transferring when signing repair contracts after a covered loss.

While the law primarily regulates contractors and insurance carriers, Wisconsin homeowners should understand how these agreements work and what questions to ask before signing one.

What Is an Assignment of Benefits?

An Assignment of Benefits, commonly called an AOB, is an agreement in which a policyholder transfers certain rights under an insurance policy to a third party, such as a restoration company or contractor.

In some situations, contractors have used these agreements to pursue payment directly from an insurance carrier and, in certain cases, participate in claim-related discussions. Because signing an AOB may affect a policyholder’s rights, it is important to carefully review any agreement before signing and understand its potential implications.

What Does the New Wisconsin Law Do?

Signed into law as 2025 Wisconsin Act 230, the legislation creates Wis. Stat. § 632.11, establishing new requirements for post-loss assignments of benefits involving residential property insurance claims. The law takes effect on December 1, 2026

Among other provisions, the law:

  • Requires specific written disclosures in assignment agreements.
  • Includes mandatory language designed to help homeowners understand the rights they may be transferring.
  • Provides homeowners with a limited period to cancel certain assignment agreements.
  • Establishes penalties and enforcement mechanisms for violations of the statute.

The stated goal is to help homeowners make informed decisions during what can often be a stressful time following a property loss.

When Does the Law Apply?

The law applies to certain post-loss assignments involving residential property that has been damaged by specified catastrophic events, including:

  • Fire
  • Flood
  • Tornado
  • Hailstorm
  • Windstorm
  • Earthquake
  • Certain weather events that result in a gubernatorial state of emergency declaration

Because the statute applies to particular situations and circumstances, homeowners should review the details of any assignment agreement and consult appropriate parties if they have questions.

What Should Homeowners Consider Before Signing?

Following a significant property loss, homeowners may be presented with documents from contractors, restoration companies, or remediation firms soon after damage occurs. While many contractors provide valuable services, it is important to understand any document before signing.

Before signing an Assignment of Benefits agreement, consider:

  • What rights are being assigned?
  • Can the agreement be canceled, and if so, within what timeframe?
  • Does the agreement authorize direct payment to a contractor?
  • Have you notified your insurance carrier and discussed the claim process?
  • Do you fully understand the terms of the agreement?

If something is unclear, consider contacting your insurance carrier or trusted insurance advisor for additional information before proceeding.

How Can Your Insurance Agent Help?

While insurance agents cannot provide legal advice, they can help policyholders understand the insurance claims process and direct them to appropriate resources.

Wisconsin policyholders are encouraged to:

  • Read assignment agreements carefully.
  • Ask questions before signing.
  • Contact their insurance carrier if they are uncertain about how an agreement may affect their claim.
  • Report concerns of potential violations to the appropriate authorities when warranted.

Closing Takeaway

Property losses caused by severe weather, fire, or other catastrophic events can create pressure to make quick decisions. Wisconsin’s new Assignment of Benefits law is intended to provide additional consumer protections and increase transparency when homeowners are presented with post-loss repair agreements.

Taking a few extra minutes to review documents, ask questions, and understand your options may help you make more informed decisions during the claims process.

Your Robertson Ryan Insurance team can help explain how the claims process works, discuss policy-related questions, and connect you with appropriate resources so you can make informed decisions following a loss.