Why Do Homeowners Lose When Insurance Companies Use Managed Repair Programs?

Homeowner’s insurance companies advertise their managed repair programs as if they were created to benefit the policyholder. Make no mistake: These programs are designed to boost the profits of the insurance company—often at the expense of the policyholder in our opinion, based upon our experience.

When an insurer uses a managed repair program, it gets to choose the contractor who restores your property and how your property gets repaired. You, the homeowner, will have little to no say in the matter if you listen to your insurance carrier.  In many instances, even when a “managed repair provision” is in your insurance contract (the policy of insurance), it is often either not enforceable or not enforceable in the manner and to the extent the insurer will have you believe.

The insurance company might tell you that this process saves time because you do not have to find a contractor or manage the repairs. They may also claim this is to protect you from shady vendors and fraud.  What it won’t tell you, though, is that the contractor, gets a lot of its business from the insurance company or insurance companies in general.  Consequently, the contractor’s bigger concern may be keeping the insurance company happy by doing things as quickly and inexpensively as possible which may not be the right way, may not be less than you are entitled to and is certainly not having someone looking out for your best interests.  In such scenarios, the contractor has financial incentive to minimize the cost of your repairs.

As a result of this backward system, damaged homes are often not restored to their pre-loss condition, which usually means that the insurer has not held up its end of the policy contract. If this happened to you, contact Leader & Leader P.A.

Michael D. Leader is an insurance claims lawyer in Fort Lauderdale who will evaluate your situation to find out if you were a victim of insurance bad faith. If so, you may have grounds for a lawsuit against your insurance company. Call 954-523-2020 today to schedule a free initial consultation.

How Common Are Managed Repair Programs?

Because Florida is so vulnerable to hurricanes and sinkholes, our state has the highest homeowner’s insurance premiums in the country—109-percent higher than the national average. Despite this exorbitant cost, homeowner’s insurance companies still seem do everything they can to undervalue or deny claims in our opinion based on experience.

Managed repair programs allow insurance companies to save money on approved claims. Rather than allowing homeowners to choose their own qualified contractors, the insurance company can use its own contractor.

This process has proven to be incredibly lucrative for insurance companies, which is why some of the top insurers in Florida have instituted managed repair programs. Examples of these companies include Florida Peninsula Insurance Company, People’s Trust Insurance Company, Heritage Property & Casualty Insurance Company, and even Citizen’s Property Insurance Corporation.  Based on the most recent policies we have reviewed, People’s Trust has the most developed “right to repair” language in their policy and is arguably one that has a higher chance of being enforceable in some situations.  However, it seems that the repair company, the Rapid Response Team, is closely related if not ultimately owned by the same people.  We have had a few clients that were not upset with the minor repair work done by even in the most recent case, they damaged our client’s hard wood flooring that runs throughout the home.  We had another case in which they attempted to repair the kitchen three times but did a deplorable and unacceptable job while neglecting to pull permits or do the work to code.

What Is “Insurance Bad Faith?”

Insurance bad faith is a type of claim that policyholders make against their insurance companies due to illegal or unethical acts. Common examples of insurance bad faith include but are not limited to:

• The insurance company attempts to deny or undervalue a claim that should be covered;
• The insurer delays the approval of a covered claim;
• The insurer attempts to deny a claim using new policies without giving the policyholder appropriate notice;
• The insurance company denies or undervalues a claim based on inaccurate information; or
• The insurance company engages in fraudulent or illegal practices.

If you were a victim of insurance bad faith and you have to file a lawsuit against your insurance company to enforce your rights, your insurer will have to pay for your attorneys’ fees and other costs of doing so. Attorney Michael D. Leader can evaluate your case to determine if you have grounds for an insurance bad faith claim. Call 954-523-2020 today to schedule a free consultation with an insurance claims lawyer in Fort Lauderdale.