Managed repair is the rage of many insurance companies. To reduce claims costs and better compete on low price, some insurance company adjusters use various techniques to steer or pressure policyholders into using contractors the insurance company wants the policyholder to hire. Independent restoration contractors and public adjusters have legions of stories about how adjusters achieve these low-ball payment goals through pressure techniques of innuendo or threats of non-payment.
The North Carolina Department of Insurance recently issued a bulletin condemning these practices.
[T]he Department has also received some reports that some outside adjusters are insisting that consumers use the services of certain firms for damage repair. I would like to remind the companies that North Carolina has very strict anti-steering laws that prohibit companies, agents, adjusters, or appraisers from requiring consumers to utilize a particular service or source for repair of autos or property damage. I refer you to N.C. Gen. Stat. §§58-3-180 and 58-33-76, as well as other statutes and regulations, for review of our anti-steering laws. Please ensure that any out- of-state adjusters or any in-state adjusters you use to adjust claims in North Carolina are familiar with and adhere to our anti-steering laws.
We have started looking at managed repair programs many major insurance companies have been devising and entering into. One example is through a third-party administrator, MadSky, which describes their program as follows:
MadSky Managed Repair Program, LLC (“MRP”) is a nationwide third party administrator for insurance companies specializing in roof repair and restoration. The initial pilot program was launched in partnership with a major nationwide insurance company in the spring of 2015. Since the launch of the pilot program, MRP has entered into further partnerships with other national insurance companies and third party administrators, providing access to property owners insured by several carriers all over the country.
MRP is leading the revolution to re-engineer the restoration industry by working directly with insurance companies to streamline all aspects of the inspection, restoration, and claim process. By utilizing MRP’s extensive training and technology, our robust and skilled national network of program contractors (“Program Contractors”) are rewriting the roofing industry standard by focusing on evidentiary facts that lead to accurate recommendations. Through their partnership with MRP, insurance companies are able to standardize the claim process and provide homeowners the hassle-free experience they deserve.
Since its formation, MRP has developed a nationwide network of Program Contractors that employs hundreds of skilled workers.
From stories we have heard, “re-engineered” programs like this have insurance companies buying materials in bulk, setting prices the third-party administrator then requires of not so “independent” adjusters to place in estimates and then requires program contractors to approve. The “independent” adjuster then pressures the policyholder to do the work with the program contractor with a threat made in various forms that the insurer will pay no more money than the amount agreed to by the program contractor.
I am certain we will hear a lot more about these situations in the future. At least the North Carolina Insurance Commissioner is protecting Hurricane Florence victims from this wrongful claims practice.
We would suggest Hurricane Florence and Michael policyholders follow some of the guidelines we recently published in Do Not Make These 7 Mistakes When Choosing a Roofing Contractor After a Hurricane.
Thought For The Day
We shape our buildings; Thereafter, they shape us.