How can a right to repair clause harm my home insurance claim?

by Oct 28, 2021Article

If you see “right to repair” or “option to repair” in your homeowners’ policy it could mean trouble.

What is it?

These provisions in policies permit the insurance carrier (when they invoke it during the claims process) to assign one of its preferred vendors to perform repairs on your property.

Consider this: you file a roof claim with your carrier. The carrier determines you have coverage and informs you its preferred vendor will perform the repairs. You might think this is good news because it will save you the hassle of having to find and pay for your own contractor out of the proceeds from your insurance claim.

Nothing could be further from the truth; when hear right to repair, be afraid, be very afraid.

Countless problems can arise by allowing the insurance company to perform repairs to your property via one of its vendors. In my professional capacity I have witnessed:

  • Incomplete repairs (started work was never finished leaving openings in the floors where I saw critters scurrying);
  • Inadequate/faulty repairs (the preferred vendor improperly installed roof);
  • Repairs by the preferred vendor caused additional damage to the property; and
  • Repairs that seemed to take forever.

Full disclosure: This is not blanket condemnation of all loss consultants (roofers, general contractors, loss mitigation experts) who do preferred work for insurance carriers; rather, it seeks to point out that when the carrier is paying for services, it decides on the scope and the pricing of the work. In other words, the carrier is pulling the strings on the contractor’s work. The homeowner is losing control.

So which insurance companies have the most right to repair provisions?

The Three Big Bad Right to Repair Carriers

There are primarily three main insurance carriers in Florida that have a preferred vendor provision and invoke it consistently on covered losses:

  1. People’s Trust Insurance Company;
  2. Citizens Property Insurance Company; and
  3. American Traditions Insurance Company

Even carriers without a right to repair provision in their policies sometimes pressure homeowners to retain the services of the loss consultant who evaluated the claim on behalf of the carrier. Conflict of interest is obvious where the party assessing the loss actually ends up doing the work.

What should you do if you have a right to repair clause in your policy?

The answer is an unsatisfactory one: it depends. Here’s why.

If you do NOT have a claim pending with your carrier and the policy contains a right to repair clause, immediately try to change carriers or get the provision removed. Speak to an experienced insurance attorney about your potential options in finding new insurance as soon as possible.

If you DO have a claim pending and your policy has an option to repair clause and the carrier is attempting to invoke it as part your claim adjustment process, the only way around it is to let the preferred vendor perform the repairs. If they fail to properly repair damage (which happens more often than you would think) then go after them on the grounds that the carrier is guarantor of the work (which is true). But what homeowner wants shoddy work performed at their property they have to sue to solve?

While the repair clause sounds on its face to be a smooth idea, it usually is not. It can complicate your insurance claim. Remember insurance companies never do anything that does not benefit them most.