No one wants to experience damage to their home, but it does happen. With home insurance, there is comfort in knowing that you will be able to have someone you trust fix your home. In this situation, your insurance provider could try to process your claim under their managed repair (sometimes labeled “option to repair”) program. This is something that a homeowner should be prepared for.

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The Cliff Notes: Key Takeaways From This Post

  • 1
    Managed repair programs allow insurance companies to make, control, and oversee repairs on a policyholder’s property without their input.
  • 2
    People’s Trust Insurance Company offers a discounted rate of 5% on year premiums in exchange for these rights.
  • 3
    Citizens Property Insurance Corporation and Florida Peninsula are other insurance companies that implement similar programs.
  • 4
    Homeowners have less freedom when deciding how to use the funds from the insurance company, as well as with material choices and timelines for completion.
  • 5
    Property owners should be aware of the provisions of their policy to protect themselves from potential disputes with the carrier and contractor.
  • 6
    Tell us about your insurance claim so we can evaluate it right away and make a plan of action together without having to pay out of pocket.

What is a managed repair program?

Through this program, insurance companies can make and control repairs instead of paying for a claim if the policy allows for it. Most home insurance policies have some kind of provision that allows the insurance provider to choose the contractor, materials, and oversee the repairs to your property. This would happen without much, if any, input from you. Some policies refer to this as an “Option to Repair”, like policies issued by People’s Trust Insurance Company.

Insurance companies claim using their own preferred vendors help keep costs down, resulting in lower premiums. They argue that overseeing the repairs helps them fight “inflated estimates from contractors” and ensures that property owners are actually repairing their properties using the funds provided.

These claims only seem valid if you believe that contractors are inflating their estimates or that a homeowner wouldn’t want to repair their property following a loss. These are beliefs that are not grounded in reality for the majority of home insurance claims.

People’s Trust option to repair policy

Under a People’s Trust insurance policy, in exchange for a discount of 5% on yearly premiums, homeowners give up their right to oversee the repairs to their own home. Instead, repairs will be performed by the “Rapid Response Team.” What People’s Trust doesn’t typically tell policyholders is that the Rapid Response Team and People’s Trust Insurance are affiliated companies and are owned by the same person.

Other insurance companies, such as Citizens Property Insurance and Florida Peninsula, also have similar programs. While the terms may be slightly different , the end goal is the same. These insurance companies want to oversee everything from the reporting of the claim to completion of the work.

Citizens Property Insurance Corporation’s managed repairs provision says that Citizens AND the homeowner both agree to managed repairs. Under its “Managed Repair Contractor Network Program,” Citizens may, “at our option and with your consent” provide a contractor to make covered repairs. Once the damage has been reported, Citizens will provide an estimate to the homeowner and a Contractor to make repairs. While it may seem like the homeowner would have more control with this type of insurance policy, Citizens still chooses the contractor and still directs the repairs

Why should all this really matter to a homeowner?

After a loss, most homeowners just want their property repaired as quickly as possible.

To illustrate our point, we’re going to look at People’s Trust Insurance again because they leverage their right to repair more often than other insurance carriers. We’ll start by looking at what they claim the benefits are for homeowners in Florida:

The homeowner reports a claim and People’s Trust says they will immediately send out an adjuster and, if the claim is covered, will send out the Rapid Response Team to begin making repairs. People’s Trust says that the Rapid Response Team provides a 3 year warranty for workmanship.

The benefits offered by People’s Trust are similar to those offered by other insurance companies with managed repair programs. All repairs can be handled with little involvement from the property owner.

What are the downsides to an insurance company directly making the repairs instead of paying for them?

When an insurance company pays out for a claim, the insured property owner gets to choose how to use the money. Most policies have deductibles, which lowers the amount the insurance company has to pay for the loss, but do not need to be paid first by the property owner. Some deductibles are really big, like a hurricane deductible. In that instance, a property owner might have to prioritize what gets repaired immediately if they don’t have enough money to cover the deductible. For example, someone might choose to fix their roof before painting their walls. They might also choose some way to save money on the repairs, like doing some of the repairs themselves or downgrading some items. Property owners are given the freedom of choice when claims are paid out by the insurance provider.

Repairs by insurance companies do not give people nearly the same amount of freedom. People’s Trust Insurance Company requires that the homeowner pay their deductible prior to repairs beginning work. This means that if you can’t afford to pay the deductible, you don’t get your house fixed. People’s Trust offers financing for the deductible (through another affiliated company), but even then you’re paying interest on a loan to get work done.

Another insurance company, Florida Peninsula, has a provision that says that it can elect to repair the property. If that option is taken , the homeowner must provide access to the property, execute all work authorizations and pay for their deductible.

While the Insurance company is supposed to provide a full estimate for you to approve, there