If your home was damaged in a storm and your insurance company is seeking to process your claim under its Managed Repair Program, it is important to understand what this means for restoration of your home. While insurance companies make their Managed Repair Programs sound like benefits they offer to policyholders, the reality is that these programs favor the insurance companies, and the benefits to policyholders are typically far outweighed by the risks involved.
5 Key Facts about Your Insurance Company’s Managed Repair Program
Here are five important facts to consider before you agree to have your home restored under your insurance company’s Managed Repair Program:
1. Your Contractor Has a Strong Incentive to Please Your Insurance Company.
Under a Managed Repair Program, contractors work pursuant to written agreements with the insurance companies. These agreements place conditions on the contractors’ work, and meeting the insurance companies’ requirements helps ensure that contractors will continue to get work under Managed Repair Programs.
2. Your Contractor is Probably Working at a Reduced Rate.
Since Managed Repair Programs offer contractors steady work, they typically provide for reduced rates of compensation. If the contractor repairing your home is facing a financial squeeze, it will be more likely to cut corners, use inferior materials and attempt to complete the restoration as cheaply as possible.
3. Your Insurance Company Will Try to Sell You on Its Managed Repair Program.
Managed Repair Programs save the insurance companies money by reducing the costs that they pay for repairs. As a result, your insurance company is likely to try to sell you on its Managed Repair Program without informing you of the risks involved.
4. The National Insurance Restoration Council (NIRC) is Advocating Against Managed Repair Programs.
The National Insurance Restoration Council (NIRC), a non-profit organization that is devoted to protecting property owners, is aggressively advocating against the use of Managed Repair Programs in the homeowners’ insurance industry. In a petition filed with change.org, the NIRC states:
“Consumers are being misled in the belief that the construction company being sent out is a restoration contractor handpicked by the carrier and specifically qualified to make the needed repairs but in fact the only reason they are there is because they agreed to follow the rules of Managed Repair Programs (MRP) and associated price structure. This is all very misleading and puts the homeowner in a position to think this is a quality company selected by their insurance co when this is not the case.”
5. You Have the Right to Choose Your Own Contractor.
You have the right to choose your own contractor when you file a homeowner’s insurance claim. Before agreeing to use a contractor under your insurance company’s Managed Repair Program, it is important to obtain several quotes from independent contractors. A public adjuster can also help in determining the value of your claim; and, if you run into issues with your insurance company, an experienced property damage attorney can help you enforce your rights under your policy.