If People's Trust selected its Rapid Response Team to repair your Hurricane Ian or other damage, this means People's Trust has created a new contract with you, in place of the insurance policy—one in which you have become obligated to pay People's Trust your deductible and People's Trust has become obligated to repair your home, timely and correctly. Period. Recently, we have seen People's Trust attempting to avoid and/or modify its obligations under its Preferred Contractor (“Right to Repair”) Endorsement and wrongfully place more burden on its insureds when it has no right to. Here are some issues to look out for and be aware of if People's Trust invokes its right to repair your covered damage.
How the Preferred Contractor (“Right to Repair”) Endorsement Works
In virtually every People's Trust policy, People's Trust includes their Preferred Contractor Endorsement in exchange for offering you a discounted premium. This endorsement allows People's Trust to elect to repair the covered damage to your home, rather issue a claim payment to you for the cost to repair the damage. For hurricane damage, People's Trust must send you written notice of its decision to repair your damage within sixty (60) days after its inspection of your property. Below is a typical invocation, by People's Trust, of its right to repair and selection of its preferred contractor—Rapid Response Team—to perform the repairs:
When People's Trust invokes its right to repair, this converts the insurance policy into a new contract, wherein People's Trust becomes obligated to perform repairs timely and correctly to restore your property to its pre-loss condition, and you become obligated to pay your deductible to People's Trust. What typically occurs is People's Trust prepares its initial estimate of the amount of the loss and scope of repairs—which is often far too low and would not allow for adequate repair of the property. The homeowner disputes People's Trust estimate, because it is too low, and the matter goes to appraisal for determination of the amount of the loss and scope of repairs that People's Trust must perform.
Appraisal to Determine Amount of the Loss and Scope of Repairs
The appraisal—resulting from either a compromise reached between the two appointed appraisers or a determination by the umpire—typically results in an appraisal award that is often several times greater than People's Trust's estimate. Once the appraisal award is signed by the two appraisers, or the umpire, People's Trust then becomes obligated to timely and correctly perform the scope of repairs determined in the appraisal. This remains true even if the repairs end up costing People's Trust more than the limits that would have been applicable to the damage under the policy of insurance. This shifting of any cost in excess of the policy limits is stated clearly in People's Trust's Preferred Contractor Endorsement:
How People's Trust Has Violated Its Right to Repair Contract in Ian Claims
After Hurricane Ian, we have seen People's Trust more frequently invoking its right to repair the damage, in lieu of it making a claim payment. It appears this has been a tactical strategy by People's Trust to use its preferred contractor endorsement as a tool to reduce the overall amount of the claim. Here are some examples we have seen of how People's Trust has been wrongfully leveraging its right to repair:
- Rejecting the scope of repairs set by the appraisal in refusing repair of certain damages it previously deemed were not covered that the appraisal panel determined were covered;
- Repairing an item of damage that was previously subject to a limit in the insurance policy policy—for example, a $10,000 limit on the pool cage—then sending an invoice to its insureds for the cost of the repair in excess of the insurance policy limit; and
- Refusing to begin repairs until the insureds pay for certain items People's Trust wrongfully claimed were not covered under the insurance policy and were not part of its right to repair, e., debris or content removal.
Each of these actions is wrongful and in violation of the new contract People's Trust entered into with their policyholders whereby the policyholder is only required to pay the deductible, then People's Trust is obligated to repair the property, timely and correctly, even if it requires paying more to repair an item than the policy's limit for that item. Courts have even assessed damages that were not in the insurance policy (e.g., additional living expenses) against People's Trust where it failed to timely and properly repair the property because the damage naturally stemmed from People's Trust breach of the right to repair contract.
If People's Trust Has Invoked Its Right to Repair Your Damage, Know Your Rights
We want policyholders to understand that a clear written notice from People's Trust informing you it has selected its preferred contactor, Rapid Response, to repair your damage, this creates a new contract between you and People's Trust that changes each party's rights and obligations. All you are required to do if People's Trust elects to repair your damage, in lieu of issuing payment on the claim, is pay the deductible and People's Trust becomes obligated to repair your damage timely and correctly, i.e. utilizing material of like kind and quality and ensuring adequate workmanship. Don't let People's Trust try to avoid its contractual obligations, refuse determinations made in the appraisal, or charge you for amounts you are not obligated to pay. If you have a claim with People's Trust and have questions about your rights and obligations, contact us. Our experienced insurance attorneys never require any fee, cost, or obligation to review your claim and make sure you understand your rights.