In doing research the other day I came across a PowerPoint presentation from an insurance industry trade show where the opening slide states "Finding Financial Payback In Claims." This sure sounds like an advocation for claims departments of insurance carriers as profit centers. One of their topics during the presentation was using managed repair programs to achieve this outcome. Now many in Florida have begun seeing insurance carriers invoking the right to repair damaged property in claims with great frequency. The right to repair has always been in policies and has been very commonplace in auto damage cases, but many carriers in Florida have seriously tweaked their policy language related to these managed repair programs to contain several pages of detailed language. It is not the simple one paragraph our option to repair language anymore.
So it should not be surprising to hear that the presenters of this topic in the materials I found were representatives from Florida Peninsula Insurance Company and a Manager from Crawford & Company—one of Florida Peninsula’s preferred vendor contractors in its managed repair program.
The presentation materials cite to various policyholder friendly statutes like the 25% rule and the matching statute and delve into how the managed repair program "provides the carrier more control over the expense" and that the "average gross loss has decreased by 6.33% since inception of the managed repair program." And a whopper of a "net savings of almost $1,000,000 on less than 1,100 claims.
These details and the focus of this presentation are astounding at how the insurance industry touts this to its advantage to drive its own profits higher. It sounds to me like the policyholders may be taken advantage of and take what they can get instead of getting their own experienced insurance representatives to handle their claim in a traditional sense; and this is being marketed as a great thing and it even increases profits for the insurance carriers! Bravo insurance industry and thank you for placing this publication into the public domain.
The interesting statistic I would like to see would be a poll of those policyholders that once they finally realize that they have this managed repair program endorsement (which won’t be until they have a claim) and go through the process: how many think they received good service? How many think their property was adequately restored to its pre-loss condition? How many had to fight with their insurance carriers after the work was completed for it to be redone right? How many felt that the preferred vendor contractors cut corners? And last but most important, how many people would utilize the managed repair program again if they had a claim or would they rather pay the slightly higher premium to not have to deal with the managed repair program?
If you have a question about this managed repair program, if it is being demanded by your insurance carrier or if you just want to know if your policy contains a managed repair program then please contact us.