Insurance companies historically rarely invoked their right to repair a structure. They often did so with jewelry losses because damaged or lost jewelry could much more easily be copied or repaired. Few structural repairs are ever done correctly or to the satisfaction of a property owner. Indeed, the annals of construction history are full of litigation between contractors and upset property owners. So, why are modern insurance carriers invoking the right to repair?

Answer—Leverage to reduce the claim amount.
Continue Reading Invoking the Right to Repair and So-Called Managed Repair

In October 2016, Guillermo Acosta and Laura Pirela (the “Insureds”) suffered a water loss at their home and filed an insurance claim.1 The insurer inspected the property and then invoked the ‘elect to repair provision’ under the policy that stated as follows:

If a peril causing a loss and related damage are covered (other than sinkhole loss) and repairs are necessary to protect covered property from further damage, [the Insureds] must notify [the Insurer] before authorizing or commencing repairs so [the Insurer], at [its] option, may select Rapid Response Team, LLC™ to make the covered Reasonable Repairs.

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If [the Insureds] and [the Insurer] fail to agree on the amount of loss, which includes the scope of repairs, either may demand an appraisal as to the amount of loss and the scope of repairs.

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The scope of repairs shall establish the work to be performed and completed by Rapid Response Team, LLC™. Such repair is in lieu of issuing any loss payment to [the Insureds] that otherwise would be due under the policy.


Continue Reading An Injunction Forcing Homeowners to Comply with An Elect to Repair Provision Won’t Fly, Florida’s Third District Confirms

Recently, the Second District Court of Appeal affirmed the dismissal of a class action against Omega Insurance Company in which the policyholders asserted that Omega improperly required them to pay a deductible when Omega invoked its right to repair the property.
Continue Reading Policyholder Must Pay Deductible When Insurance Company Invokes Right to Repair a Partial Loss