People’s Trust Insurance Company statement

Reporter: Andryanna Sheppard
Published: Updated:
Homes in Lee County. (credit: WINK News)

Certain insurance carriers, People’s Trust included, have what’s called a Preferred Contractor Endorsement. This gives a carrier the right to repair a covered loss, if the carrier chooses to do so. In our case for PTI, the insured enjoys a 5% discount on their premium if they choose this endorsement, which most of our policyholders select. In every recorded conversation, and in all communications sent to policyholders, we make certain that the insured knows that they have chosen the Preferred Contractor Endorsement, and that they understand what it means. This endorsement is seen by policyholders as a tremendous benefit, since they don’t need to scramble finding reliable contractors and service workers to complete work needed as a result of damage to their home. As an added benefit, our affiliate, Rapid Response Team, provides a 100% satisfaction guarantee on workmanship, and the work isn’t completed until the homeowner acknowledges their complete satisfaction. The benefit to People’s Trust is that we are assured that the homes we insure are being restored by quality workmanship to our highest standards so that no further damage or loss will ensue as a result of shoddy workmanship. This endorsement and relationship to Rapid Response Team is the foundation of our business model and has proven to be a benefit to homeowners who choose us over other carriers because of the convenience it provides them.

PTI has implemented this process since 2016 and the entire Florida insurance industry understands and has even emulated our process. We want to fix our customers’ homes but face roadblocks from a small number of represented homeowners – your question should be, why wouldn’t an insured want his or her home repaired to pre loss condition by licensed contractor who has the same owners as his or her homeowner insurer that is provided insurance coverage on the home? The insurance carrier has a vested interest in the homes they insure being seamlessly restored to prevent further loss.

Below is a simple summary of the issue at hand and will hopefully explain to you why it’s important for our policyholders to comply with their Preferred Contractor Endorsement:

  • We never want to sue our policyholders. It is a measure taken as a last resort in order to help them settle their claim.
  • If a policyholder has engaged with an unscrupulous public adjuster or contractor, they may not know that they assigned their insurance benefits over to these bad faith actors. This is known as an AOB, or assignment of benefits.  When this happens, we can no long speak directly with our policyholders. Often, the policyholder doesn’t even realized they’ve signed an AOB and doesn’t know we can longer contact them. Sometimes, the only way to get their direct attention is through a declaratory action.
  • This is a simplified explanation of AOB, which is no longer allowed as of the new legislative action taken at the beginning of this year:
  • Assignment of Benefits (AOB) is a contract between an insured (policyholder) and a contractor (such as a plumber, water remediation company, roofer, etc.) when a claim occurs that gives the contractor control of your claims benefits.
  • The homeowner often unknowingly signs a form that includes an Assignment of Benefits agreement.
  • These forms may allow the contractor to collect your claim settlement funds directly from your insurance company. This results in the homeowner losing control of their claim and it could mean having to pay amounts beyond what is covered in their policy.
  • The contractor could even place a lien on the home which could be enforced by foreclosure.
  • Many of our policyholders have our Preferred Contractor Endorsement on their policy, for which they receive a 5% discount on their premium. If we elect to repair, and, the policyholder doesn’t comply with the simple protocol outlined in their policy, then they are in breach of their insurance contract.

Here’s how the claims process works with our Preferred Contractor Endorsement:

  • Once a claim is filed, we send an adjuster to the insured’s home after which coverage and scope are determined.
  • If the claim is covered and the insured agrees on the scope (by signing a work authorization), our Direct Repair model goes into effect, and we exercise our right to repair the home based on the scope of work.
  • Our affiliated general contractor, Rapid Response Team, performs the repairs with 100% customer satisfaction and a 3-year guarantee on workmanship.
  • If, however, the policyholder does not agree to the defined scope of work, our contract with them stipulates that we then go to appraisal where an independent third-party appraiser, agreed to by both parties, assesses the claims damage and presents a new scope of work to which each side has given consent.
  • This process is very effective in avoiding litigation, as it provides for an immediate path for accordance when there is a scope dispute.
  • If the insured does not promptly agree to allow us to repair per our assessment of the loss, we make repeated efforts to obtain the insured’s version of the claimed loss which is often met with obstruction and delay on the part of some insureds or their representatives. When the informal process of scope dispute resolution breaks down, we have no choice but to seek appraisal if the insured has submitted estimates which are at large scope variance, or court relief on the occasion where the insured refuses any compliance with production of documentation setting forth their claimed loss. 
  • To be clear, we do not go to appraisal for determination of coverage, it is only for scope and cost disputes.
  • Often the process breaks down when the policyholder avoids our calls for setting up an appraisal appointment, which stalls the resolution of the claim.
  • The process also breaks down when we have elected the right to repair, but the policyholder performs repairs on their own, which negates their agreement with us.
  • The special legislative sessions were very helpful to both insureds and carriers and address some of the problems with frivolous lawsuits.
  • Florida accounts for 79% of the nation’s homeowners’ insurance lawsuits over claims filed while making up only 8% of the nation’s homeowners’ insurance claims
  • No more AOB
  • No more one-way attorney fees
  • Statute of limitations reduced to one year

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