It is inevitable that at some point during your time as a homeowner, that you will need to repair or replace something on your home. The most common and significant home repairs often include repairs to the foundation, electrical systems and wiring, roof, water heater, pipes, septic systems, heating and cooling units, etc. In most of these cases, replacement is often the ideal solution, but this can be hindered by the right to repair clauses that exist in many homeowner’s policies.
When you experience damage to your home or property and then turn in a claim to your insurance company, don’t be surprised if the insurance company elects to exercise the right to repair clause. This clause is often missed or misunderstood by homeowners when they review their initial policy. However, this clause is critical to understand as it means that the insurance company can elect to repair the problem instead of offering a replacement. When this occurs, it likely means that the insurance company will require the use of their contractors to come in and do the work. And, this can also mean that repairs may be incomplete, take an exorbitant amount of time, or not be performed to industry standard.
Know what your homeowner’s insurance policy includes
When the time comes to purchase a home, it is only natural to spend a considerable amount of time determining the design, décor, and various home features. From carpeting to the color of the walls and the finish of the kitchen cabinets, there are a lot of decisions. But oftentimes, homeowners select homeowner’s insurance policies with less than the same diligence. These insurance policies are considered as more of checking of the box than anything.
Not all homeowner’s insurance policies are the same, however. And, you should never just blindly accept the first policy that you are quoted. Your homeowner’s insurance is intended to protect your largest investment, and therefore, you need to do your homework. Be sure to collect at least three quotes from different insurance agencies. Conduct a coverage comparison and also be sure to read all of the fine print. A professional and experienced insurance agent will have no issues spending time with you and answering all of your questions.
What you need to know about the right to repair clause in your homeowner’s insurance policy
The right to repair clause, also commonly referred to as the option to repair provision, is relatively common in the state of Florida. Though the clause is not frequently invoked, you must understand what the clause means and how it may impact your ability to repair or replace something in your home.
- Always review your policy and all of the fine print before you sign. Your insurance company can only exercise the clause if it is called out in the policy. Therefore, make sure that you know what you are signing up for so that you completely understand your rights and responsibilities as an insured homeowner.
- Your insurance company may become in control of repairs. If your policy does include the right to repair clause, it means that instead of paying you a settlement, your insurance company can elect to hire contractors to repair your property instead. Or, the contractors will be able to replace destroyed or significantly damaged items.
- When the clause is exercised, your insurance company will become the guarantor. Thus, if something goes wrong with the repair or the problem is not corrected appropriately, the insurance company becomes financially responsible for resolving the situation. This can put a burden on the insurance company, however, so homeowners must understand that it is the insurance company that is responsible to guarantee the work and not the contractor that did the repairs.
- The right to repair clause can become a negotiation point for the insurance company. Though insurance companies are becoming less and less likely to invoke the right to repair clause due to the amount of work and burden it can put on them, they do often leverage the clause as a way to pay out a less than fair settlement to homeowners. As such, homeowners need to understand that they should never accept a settlement that is anything less than fair.
Issues At A Glance
Here are some of the issues that can come up as a result of a “Right to Repair” clause in your homeowner property insurance.
- Second-Rate Repairs – When the contractor that an insurance company chooses for the repairs cuts corners or uses substandard equipment and materials, you wind up with a second-rate repair
- Partial repairs – Your insurance company can decide that you don’t need a full repair. For example, instead of replacing damaged material, they can have their chosen contractor simply resurface the material.
- Lack of control – with a “Right to Repair” clause in your homeowner property insurance, the insurance company holds lots of power. This means that they can tell the contractor to completely ignore your needs and do whatever they (the insurance company) feel is necessary.
- Illegal/Permit-Free Repairs – This one is a rare one, but every so often you’ll get an insurance contractor that performs unlawful repairs and works without permits.
- Lost Time – Many times, policyholders won’t feel comfortable leaving their homes in the hands of a contractor that they don’t know. When it comes to a contractor hired by the insurance company? That sense of distrust can go up even higher. If a policyholder can’t feel as though they can trust their contractor, then they have to stay at home to monitor the insurance company’s repairs.
The challenges with the right to repair clause
In recent years, the right to repair or option to repair clause has become a hot topic in the state of Florida as most insurance companies operate under this provision. Though there can be benefits to the clause, providing full control to the insurance company related to damages to your home is not always the best situation.
The clause was designed to protect the best interests of the insurer and not the insured. As insurance agencies are in the business of making money, they tend to be very protective of the funds that they pay out for claims. This isn’t always the best situation for the homeowner. Repairs need to be done by a professional that is properly skilled and that will leverage the appropriate high-quality materials.
When the insurance company exercises the right to repair clause, the homeowner has little to no involvement in the repair work or in what happens next. The insurance company not only pays the contractor but hires the contractor too. Thus, the contractor is under no obligation whatsoever to communicate with the homeowner. Even homeowner questions need to be routed to the insurance company instead of the contractor that will be far more familiar with the work being done. Further, as the insurance company is looking to complete the repairs at the lowest investment possible, you could end up with work that is less than stellar.
The right to repair clause also removes the ability for the homeowner to dispute an insurance settlement. When your insurance company decides to invoke their right to repair, the law in Florida indicates that the insurer becomes the legal guarantor of the repairs. This allows the insurer to force homeowners into accepting a settlement offer through the threat of control of the repairs, and their own contractors, even though the homeowners might not agree.
Understanding homeowner rights
Though invoking the right to repair provides the insurer with full control over the repairs and construction, it does not mean that the homeowner is left without rights. Homeowners absolutely have the right to ensure that work is done properly and with materials of a high quality. According to the state law in Florida, homeowners can rightfully demand a full plan of the repairs. This plan should include the project scope of the work, a list of the materials being used, and confirmation that the repairs meet relevant building codes.
As such, though the homeowner may not be able to specifically control who does the repairs, they can be guaranteed that the work will be done properly. Unfortunately, getting the insurance company to cooperate and get to the repairs promptly can be a bit more complicated. This is where public adjusters can come into play and work to support the homeowner with their rights and in processing the claim, provided that a public adjuster is contacted early on in the process.
Public adjusters will review the homeowner’s insurance policy to help the homeowner better understand how the right to repair clause will affect the overall repair process. Public adjusters can further assist by working with the insurance company on behalf of the homeowner so that the homeowner isn’t subject to unwarranted tactics that may lead to a claim being paid for less than what it is worth.
Insurance companies are known to use various tactics that can get them out of paying full value on a claim. But when a public adjuster is brought in, the homeowner can be assured that the adjuster will be their advocate and get them the claim reimbursement that they are due.
When in doubt about the home insurance process, going with a public adjuster is the most definite way to get a higher settlement on your home insurance claim, instead of gambling with the insurance company’s adjuster.
Bulldog Adjusters has over ten years of experience in the field. Our adjusters are homeowners as well, people who know what it’s like to deal with insurance companies over property damage. We’re practiced in making sure that homeowners get the largest possible settlement from their insurance companies. If you have property damage and loss as a result of a natural disaster or other incident and you’ve received a lowballed claim settlement by your insurance company, reach out today to find out how we can help you!