The assignment of an insurance claim is an assignment of a contractual right or benefit. It is when one confers the financial payment or obligation of the insurer to another making them the beneficiary.
Section 317 “Assignment of a Right” found in the Restatement of Contracts Law defines the assignment of a contractual right as follows.
The section reads as follow:
(1) An assignment of a right is a manifestation of the assignor's intention to transfer it by virtue of which the assignor's right to performance by the obligor is extinguished in whole or in part and the assignee acquires a right to such performance.
(2) A contractual right can be assigned unless
(a) the substitution of a right of the assignee for the right of the assignor would materially change the duty of the obligor, or materially increase the burden or risk imposed on him by his contract, or materially impair his chance of obtaining return performance, or materially reduce its value to him, or
(b) the assignment is forbidden by statute or is otherwise inoperative on grounds of public policy, or
(c) assignment is validly precluded by contract.
In other words, it is the transfer of one party’s legal relationship within the contract to another.