An Insurance Company’s “Right to Repair”

Jan 19, 2018

People’s Trust Insurance has filed dozens of lawsuits against customers it claims have failed to comply with homeowners’ insurance policy requirements. Most of those lawsuits accuse policyholders of refusing to allow the insurer’s preferred contractors to repair the claimed damages.

Most homeowner’s insurance policies include a provision giving the insurer the “right to repair,” or the “option to repair” (or something else using similar language). Such “managed repair” clauses give insurance companies control over who performs repairs covered under the insurance policy. In other words, instead of writing a check to the homeowner and allowing him to choose his own contractor, the insurer chooses the contractor. This also means that homeowners can’t perform repairs themselves.

“Right to repair” provisions are legal under Florida law. In fact, the Homeowner Claims Bill of Rights specifically states that it “does not prohibit an insurer from exercising its right to repair damaged property in compliance with the terms of an applicable policy.”

Insurance companies claim that the “right to repair” clause curbs contractor abuses, while critics and attorneys say it enables insurers to perform repairs more cheaply and results in substandard repair work.

Regarding People’s Trust, the company they use for repairs is called the Rapid Response Team, which is an affiliated company of People’s Trust. The companies share two corporate officers, according to records on file with the state Division of Corporations. This certainly brings into question their objectiveness and the quality of their work product both of which are NOT in the best interest of the consumer.

Additionally, People’s Trust’s business model require that customers pay their deductibles before repairs may commence and People’s Trust even created a finance company to enable policyholders to finance with interest, that deductible over time.  Having to pay a deductible before the work gets started does NOT work when the consumer is short on cash.  Most other insurance companies, when their claims are filed against them, payout the claim for the loss, minus the deductible.  Then consumer having the money can then hire their own contractors and make repairs in stages if they are short on cash and not have to deal with the deductible.

In the People’s Trust lawsuits, the insurer claims that customers knew that they were giving the company the right to repair damages using their preferred contractor.

Policyholders, the lawsuits claim, were in turn provided with “adequate monetary consideration by way of a … premium discount.” Whether the insurer prevails on its claims or whether the customers win likely depends on the facts of each particular case.

Citizens’ Managed Repair Program

The state government created Citizens Property Insurance Corporation in 2002 to provide property insurance to Florida residents who can’t find coverage in the private market. Eligible residents include homeowners and business owners. Citizens Property operates according to statutory requirements and its operating plan must be approved by the Florida Financial Services Commission.

Since July 1, 2017, new and renewing Citizens policies have included language “encouraging” homeowners to utilize the insurance company’s managed repair program. Citizens will provide a contractor to perform repairs “at our option” and with the homeowner’s consent. Customers have the right not to participate and to terminate consent even after repairs have begun. However, the policy language also states that, even if a homeowner opts out of the managed repair program, Citizens may still repair the damaged property “in lieu of payment and at our option.”

That language is confusing for policyholders who might not understand their right to repair clause.

An experienced insurance attorney can help you with any disputes that arise under your policy so that you do not lose control over the repairs being made.

Reach Out To The Insurance Litigation Group Today for Assistance

If a dispute arises between you and your insurance company over a “right to repair” provision in your homeowner insurance policy, contact an experienced insurance attorney today.

Homeowners have multiple options when it comes to resolving disputes with their insurance providers. The Florida attorneys at the Insurance Litigation Group can guide you through the insurance claims process and help you understand the terms of your policy, including any right to repair or managed repair provisions. Contact us today for a free consultation.




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