You May Be Out of Pocket for the Overage!

Policyholder Beware

In 2016, the state-run Citizens Property Insurance Corporation implemented a new restriction for homeowner policyholders imposing a $3,000 cap on emergency services. Other Florida insurance companies have already followed suit, changing their insurance policies to follow Citizen’s trend.

This new cap for Citizen’s emergency services was approved by Florida’s Office of Insurance Regulation for Citizen’s specifically as a state-run agency in July 2016, in an effort to curb the dramatic increase in loss claims and loss claims lawsuits being filed by homeowners in the state. Lawsuits have flooded state courts in the past couple of years and are at an all time high as a result of fraudulent use of the Assessment of Benefits (AOB) form by insurance companies and restoration contractors alike. While this new legislation may deter criminal behavior by restoration contractors, it does not address the fact many insurance companies do not pay out enough in the claims settlement process for homeowners to restore their property properly.

The sad truth here is that policyholders like you and me are still the one party in the settlement claims process whose rights remain unprotected, although we pay our monthly premiums on time, like clockwork, each month. And, any person with a van and an air blower can advertise that they do emergency insurance restoration and knock on your door seeking your job. Instead of licensing this unlicensed industry, the financial burden is placed on the backs of their customers!

The new rule allows Citizen’s Insurance Corporation and other insurance companies a right to cover only partial emergency repairs unless agreed to by them. The emergency service company that you call must notify the insurance company within 72 hours that the cost of your services will exceed the $3000 cap imposed under the new insurance policy.

The likely scenario is your home was flooded due to a broken pipe or hot water heater that breaks, and you call a plumber to your home.  The plumber refers you to an emergency service contractor with whom they have an undisclosed financial relationship. How is this you may ask? Many of these Florida plumbers receive kickbacks of anywhere between $500 and $1,500 for your lead.  That’s right you are being sold up the river, so to speak, to the emergency service vendor.

What happens if the company you hire to remove the water from your residence, tarp your roof after a storm, or board up your home after a fire does not notify the insurance company in the proper time period? Or they charge you in excess of the imposed $3,000 limit without getting the insurance company’s approval to do work that will exceed the limit?

If the above happens the possibility now exists that the insurance company will refuse to pay the emergency service provider anything above the $3000 cap. If this happens it is possible that the customer’s invoice for services gets embroiled in litigation between the emergency service company and the insurance company. Even worse than unknowingly being involved in litigation, the emergency service company has the right to lien your property until it gets paid in full.

As a homeowner policyholder, especially in South Florida, you might want to find out, before you purchase insurance, if your insurance company has placed a cap on any emergency service?

Your public adjuster will help you interpret the insurance company’s policy quickly so you don’t fall into one of these new traps and get left holding the bill!

If you have a property damage insurance claim and want someone working for you, and only for you, call Steven Venook at Advocate Claims Public Adjusters at 954-369-2869 or Report a Claim

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