Right to Repair

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In addition to raising the cost of insurance premiums, insurers appear to be issuing more policies which include “right to repair” provisions. Considering the rising cost of insurance premiums, a policy with a right to repair provision or endorsement might initially seem appealing to homeowners as such policies often come with a “premium discount.” The unfortunate fact is that right to repair provisions and endorsements significantly alter policyholders’ rights under the policy. I wrote recently about how insurance carriers use this “premium discount” against policyholders in my recent post, Right to Repair: How People’s Trust Insurance Company’s Preferred Contractor Endorsement Leaves Policyholders Over a Barrel. My colleague, Anthony Orlando, has also written recently about the unfortunate and oftentimes, unforeseen, effects of right to repair provisions. In his recent post, Right to Repair: The Intersection of the Managed Repair Program and the Faulty Workmanship Exclusion, Anthony discusses how an insurer can use its own preferred contractor’s shoddy work to deny future claims.
Continue Reading Right to Repair: Florida Court Confirms Homeowners’ Right to Pursue a Breach of Contract Action After an Insurer Elects to Repair

Property insurance policies with language that gives insurers the power to invoke their “Right to Repair” is a trend that is, unfortunately, becoming more and more common. While the provision in these policies does sound like a good idea in theory, the way insurers utilize them is anything but as intended.
Continue Reading Right to Repair: The Intersection of the Managed Repair Program and the Faulty Workmanship Exclusion

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.

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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