What does the assignment clause prevent?

The assignment clause is a specific provision included in insurance policies that governs the transfer of rights or interests in the policy from one party to another. The reason that the assignment clause prevents transferring claims to another party without the insurer's consent is that it ensures that the insurance company is aware of and approves any party that is entitled to make claims under the policy. This is crucial because the insurer has underwritten the risk based on the information provided by the original policyholder. If assignments were allowed without consent, it could complicate claims handling and increase the insurer's risk exposure.

This restriction helps maintain the integrity of the insurer's risk assessment and ensures that claims are made by the party with whom the insurer has a contractual relationship. Additionally, it helps to prevent potential fraud or abuses where a policyholder might assign a claim to another party that the insurer would not have originally insured or accepted under the terms of the agreement.