Insurance Companies Suing Policyholders When Exercising Their Option to Repair

FORT LAUDERDALE, Florida. More and more in Florida, insurance companies are putting clauses in their insurance policies that require homeowners to use the insurance company’s “preferred contractor.” This practice, also known as “option to repair” or “managed repair” has been causing some serious problems for homeowners who have had to make claims after Hurricanes Irma and Maria.

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According to the Sun Sentinel, one insurance company has gone as far as to sue its own policyholders for failing to abide by the policy’s managed repair plans. The insurance company claims that policyholders were aware that they were electing to take out a policy with a managed repair clause. However, some homeowners who may have not read their policies before signing or who may not have understood the fine print, may be finding themselves unsure what to do.

Insurance companies may elect to use their “option to repair” or “managed repair” rights instead of paying homeowners and allowing them to make the repairs themselves. Homeowners who are waiting for cash settlements may find themselves suddenly being forced to use the insurance company’s contractor. Some homeowners have expressed dissatisfaction with this process claiming that the contractors used by the insurance companies produce less than adequate repairs. According to ABC Action News, when a private contractor’s plan was compared to an insurance company’s contractor’s plan, the private contractor’s plan was found to be more thorough. For example, when a homeowner’s walls were crushed, the insurance company’s contractor wanted to repair them while the homeowner’s contractor wanted to rebuild them. Rebuilding the walls would have been more expensive, but would have been a better repair.

Insurance companies claim that they use their option to repair to avoid contractors from overbilling for repairs. However, policyholders claim that the work performed by the insurance companies’ contractors is not thorough or sufficient. In some cases, homeowners have had to pay out of pocket to fix the poorly-performed work of these contractors.

Homeowners and policyholders should be aware that even if they have signed “managed repair” clauses, insurance companies have a responsibility to perform proper repairs and manage repairs in a timely manner. If the insurance company delays or provides inadequate workmanship, then homeowners and policyholders may have the right to seek a cash settlement for their damages.

The managed repair claim process is different than other insurance claims. With managed repair claims, the policyholder must pay the insurance company the deductible and then the company will bring its contractors to complete the repairs. Usually, when managed repair is not used, homeowners choose their own contractors and are then reimbursed for repairs.

If you are having problems with your insurance company, are facing denied claims after a hurricane, or if your insurance company is asking you to let them use their own contractors, you may want to speak to a qualified unpaid insurance claim lawyer. Leader & Leader, P.A. are insurance claims lawyers in Fort Lauderdale, Florida who can help you navigate the sometimes-complex claims process.

If you are unsure of whether the managed repair or option to repair process is appropriate for your claim, you may also want to have a qualified insurance claims attorney review your policy’s fine print before repairs are completed. Managed repair policies are often pitched to consumers as being more convenient. Leader & Leader, P.A. will review your policy and help you understand potential pitfalls in the claims process.

 

 

 

 

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