Let’s talk about a major conflict of interest harmful to consumers.

Many insurers are adding a specific clause to their homeowner’s coverage that essentially states you have no real say in who does the repair work on your home, the quality of the work or materials or even when it’s scheduled. “Managed Repair” (MRP) also known as “Right to Repair” clauses are becoming more frequent on contracts between insurance providers and their customers. In most cases the impact and limitations are skipped over if addressed at all when new Policies are issued. Under such severe restrictions property owners are in for a terrible shock should they experience a loss and need to file a claim.

Instead of allowing the property owner to investigate and select a reputable contractor of their choice, the insurer hires cheap laborers to adjust the claim without being trained or licensed. This practice seemingly violates State laws for the unauthorized practice of public adjusting, and constitutes price fixing through the use of set prices that do not reflect current market rates. However, the most detrimental aspect of all this is the incomplete scope of loss and tendency for corner cutting, as these repair laborers team up with adjusters to produce as limited a restoration as possible.

There’s no other way to say it, these programs intentionally promote the underpayment of claims, poor workmanship and unethical business practices to intentionally reduce the cost of claims. This means the initial loss your property suffered may not be as harmful as the insurer’s MRP handling of it.

BIG problems of Managed Repair Programs (MRP):

• The contractors performing the repairs are controlled by the insurer and looking out for them, not the property owners.
• MRP is often deceptively presented as being independent from the insurer.
• The MRP contractor serves to limit the payout, not affect quality restoration.
• Most MRP contractors are serving as an unlicensed Public Adjuster seemingly in violation of State law.
• Some of these carriers are engaging in price fixing material costs, forcing property owners to buy materials through them and then profiting from the claim via kickbacks from suppliers and manufacturers. You don’t like this brand? Too bad.
• The contractors in these programs cut enough corners to offer waiving the insured’s deductible, seemingly placing them in violation of Georgia’s Fair Business Practices Act.
• The insured is forced to use the insurer’s specific contractor while the insurer often does not guarantee or warranty their labor.
• Insurers are stating if they cannot perform the repairs they will deny the claim.
• What is sold as an worry saving option is in fact a severe loss of consumer rights.

What can you do to protect yourself and your property?

Do not settle! Call your agent and find out what clauses may be lurking that can come back to bite you. If your coverage includes a Manage Repair, seek coverage with another company immediately.

For a list of the highest rated insurers for customer satisfaction, see our recent article:

The Best & Worst Homeowner’s Insurance Companies of 2017