Locked out of repairs: a clause that may impact your home insurance claim

NORTH PORT, Fla. – Two homeowners who said they had a negative experience with their homeowners insurance policy are warning others.

They said a single clause in their policy called “managed repair” or “right to repair” has created a nightmare for them. Managed repair means the insurance company has preferred contractors they send to your home to fix your problem, instead of sending you money to find your own contractor. Some of the companies who offer this service advertise online saying it is easier for the customer because the homeowner does not have to shop around to find a contractor. But the homeowners WINK News talked to said it caused more problems.

Mike Campbell’s roof started to leak in February so he contacted his insurance company, Tower Hill. He said from that point forward, he never heard from Tower Hill but contractors suddenly started showing up.

“The insurance company has been very quiet, they haven’t contacted us,” Campbell stated.

Campbell said the first contractor who showed up was supposed to tarp the roof, and he said that is where the problem started.

“Unfortunately when the crew put the tarp on the roof, they nailed the tarp, through the tarp and through the shingles and through the sheeting. So they basically ruined my roof when they put the tarp on.”

From there, Campbell said the problems only got worse. In the end, he said he ended up paying nearly $35,000 out-of-pocket and his leaky roof was not fixed.

Nancy Willeke had a pipe burst in her master bathroom in February. She contacted her insurance company, People’s Trust, who offers managed repair. Willeke said her insurance company would not repair what she thought was destroyed. So four months later she was still living on concrete in her bedroom because nothing had been fixed.

“They gave a scope, and I didn’t really know what that is, and it said they were only going to replace three things and that was it,” Willeke said. “All my furniture in here has got ruined, that was over $5,000…I couldn’t put a price on how much damage has been done to my walls. Let alone they broke my furniture, put a hole in my wall.”

A spokesperson for People’s Trust sent a statement that in part read, “People’s Trust has every intention of resolving this issue with the homeowner, deploying the Rapid Response Team to make necessary repairs and restoring their home to pre-loss condition.”

In another statement the company wrote, “As it relates to this specific claim, what you may not be aware of is that our affiliate, the Rapid Response Team, attempted seven times to begin the process of restoring the Willeke’s home.”

But the Willeke family said they never agreed upon what would be fixed.

Attorney Jill Henninger-Bowman with Stockham Law Group said they are seeing more insurance companies using the managed repair clause, and from what she has seen it has created problems.

“They are taken out of the decision-making process. You have to realize homeowners, people in general, the biggest asset is their home and people don’t know that these right to repair provisions are in their policies, and not all the companies utilize them. But they come out and they tell you exactly what’s going to be repaired, who is going to do it, and they tell you if they don’t cooperate, that’s fine, then they’ll simply deny your claim.”

But a spokesperson for the Insurance Information Institute defended the managed repair clause, saying it has helped cut down on fraud.

“There has been a lot of abuse of these water damage claims specifically. What happens is there’s something called assignment of benefits, where a policy holder gives up the right to control that claim. They give it up to a contractor and that contractor may bring in other professionals to do the repair work and that inflates the cost of the claim. The insurance company doesn’t get a chance to inspect the damage before it’s repaired and so the costs sky rocket, and we all pay for that,” said Lynne McChristian with the Insurance Information Institute.

McChristian said bottom line if you are filing a claim, make sure you get the adjuster and supervisor’s names and phone numbers so you can call them, and she said document everything.

As for Mike Campbell, he has reached a settlement with Tower Hill. He said he was going to get roughly $27,000 from his insurance company. Tower Hill would not speak on specifics, but wrote in an email, “My understanding is Mr. Campbell’s claim has been resolved and the matter has been closed.”

Nancy Willeke’s case has not been resolved, but Henninger-Bowman’s law firm has been in touch with People’s Trust.