Why Right to Repair Clauses Aren’t Consumer-Friendly
One of the reasons that people get homeowners’ insurance (other than the fact that it is often required by lienholders or mortgage companies) is to make sure that there is someone there to repair property in the event of damage. That’s why a “right to repair” clause in a homeowners’ insurance contract may seem so harmless. Of course your insurance company should have the right to repair your property…shouldn’t they?
The Problems With Right to Repair
Let’s assume that your property is damaged in a storm, or because of a burst pipe, or one of many other reasons that homeowners’ insurance is needed. You know a very reputable contractor who will begin repairs. The repairs will be done right, quickly, and you will be working with a contractor that you selected and that you are comfortable with. Since the damage to your home is covered by your policy there should be no problems.
Except there is a problem: your insurance policy has what is known as a right to repair clause. In many policies, this harmless-sounding name in practice gives the insurance company the right to select its own contractors to do your repairs. You have virtually no say in who is chosen to work on your property.
Conflicts of Interest
As you may imagine, these contractors make a substantial amount of money from the insurance company fixing people’s homes every day. They do not work for you—their boss is the insurance company. As such, there is a motivation and incentive for them to do work as quickly and cheaply as possible. If there is a dispute between you and your insurance company about repairs or the quality or extent of the work needed on your property, guess who the contractor is going to side with?
A right to repair clause puts the insurance company and the repair people (contractors) on one side, and you on the other side if there is a dispute. It takes decisions out of your hands and puts them in the insurance companies. The insurance company, not you, controls almost every aspect of the repairs.
Rights are Abused by Insurers
The relationship between insurance companies and contractors is so close that the construction companies are often owned in full or in part by the insurance companies themselves.
Some companies will use the right to repair clause as leverage to coerce homeowners into accepting substandard or incomplete repairs. For example, a company may offer to pay a small amount and if you disagree, they will threaten to invoke the right to repair clause and use their own contractors to do the work.
The only positive is that when an insurance company invokes the clause, chooses the contractors, and manages the repairs, it becomes an insurer of the quality of the work. If a repair is substandard or faulty, the insurance company will be responsible for fixing it—they cannot point the finger at the contractor, the way they could if there were no right to repair clause.
Is your homeowners’ insurance company refusing to pay for all or part of needed repairs to your property? Contact the Miami property damage insurance attorneys at Velasquez & Associates P.A. today for help.