Beware! Insurance Claims with Plumbers, Kickbacks, and Restoration Contractors Will Cost You!
Homeowner Insurance Claim Cautionary Report: A reason for a Public Adjuster
Diane and Mike arrived back at their Broward County home in Florida to find water pouring through 4 rooms of their home. Mike acted quickly. He went to turn off the water main and asked Diane to call a plumber.
Within the hour, the plumber had arrived and found the leaking pipe. It was a failed fitting on a supply line to a toilet that caused the leak. He fixed the leak and was able to pressure test the water system to return it to service.
The plumber, as he handed Mike his bill said, “you should call this restoration and mitigation contractor to handle the clean up and work with your insurance to pay the bill; In fact, I called them to come at least see the damage.” Not long after, the Restoration Contractor came in and set Mike and Diane at ease. They said they would handle everything.
The restoration contractor pulled out a form for Mike and Diane to sign. The form was “just to make things easy with the insurance company.” The form is actually called an assignment of benefits:
I hereby assign any and all insurance rights, benefits, and proceeds under any applicable insurance policies to Restoration Company. I also hereby authorize direct payment of any benefits or proceeds to Restoration Company. I make this assignment and authorization in consideration of Restoration Company agreement to perform services and supply materials and otherwise perform its obligations under this contract, including not requiring full payment at the time of service. I also hereby direct my insurance carrier (s) to release any and all information requested by Restoration Company, its representative, or its attorney to the direct purpose of obtaining actual benefits to be paid by my insurance carrier(s) for services rendered or to be rendered. In this regard, I waive my privacy rights. If payment is made directly to the Owner/Agent by an insurer, it shall be endorsed over to Restoration Company within three business days. I agree that any portion of work, deductibles, betterment, depreciation or additional work requested by the undersigned, not covered by insurance, must be paid by the undersigned on or before its completion. I hereby appoint Restoration Company as attorney in-fact, authorizing Restoration Company to endorse my name, and to deposit insurance checks or drafts for Restoration Company. Payment terms to Restoration Company are net-30 days. Late charges of 1.5% monthly are charged to any and all unpaid balances. Restoration Company shall be entitled to reimbursement for costs of collection (including reasonable attorney’s fees and costs) of unpaid amounts by Owner/Agent and for reasonable attorney’s fees and costs for the breach, or enforcement, or any terms of this entire service agreement.
Mike and Diane signed this agreement. This is a list of what these homeowners did not know.
- The plumber was paid $1,000 by the Restoration Contractor as a referral fee for the business. The plumber’s bill to the homeowners was $285. His motivation to get this referral fee is the ability to gain 4 times his bill.
- The Restoration Contractor completely owns any monies collected from the insurance carrier.
- Any amount over what the insurance company pays for this claim, will be the responsibility of the homeowners.
- The scope of services, the amount of services, and the timing of services are out of the homeowner’s hands.
- The Restoration Contractor stepped in the shoes of the claimant, removing the claimant from being an active participant in their own claim!
- Many insurance companies use this same approach of removing their policyholders, by using their own preferred vendors too.
Mike and Diane became a cautionary tale. The insurance carrier disagreed with the scope of the repairs that were needed on their home.
The restoration contractor turned in the following invoices for payment:
- Emergency Service Call (after hours) $1,850
- Drying and Remediation Services $15,500
- Restoration / Reconstruction $37,500
The insurance company paid the following:
- Emergency Service Call (after hours) $325
- Drying and Remediation Services $5,200
- Restoration / Reconstruction $9,750
The Homeowners were left with a bill for $39,575. They are now being pursued by the Restoration Contractor for failure to pay for repairs to their home.
Had Mike and Diane called Advocate Claims to represent their interests and only their interests during this claim process, as their public adjuster for their water damage claim that needed to be filed with their insurance company, we would have been able to get more money for the loss through proper documentation of the claim. We would have also been able to avoid progressing on the project in a way that would cause the insurance company to not cover a part of the claim.
As a Florida Public Adjuster, Advocate Claims can only represent the home or business owner, with no additional interests. As your Florida Public Adjuster, Advocate Claims cannot receive payments from any other party.
As a Florida Public Adjuster, Advocate Claims will not accept payment for services prior to collecting funds for the claim. There is no up-front cost for hiring Advocate Claims as your Florida Public Adjuster.
As your Public Adjuster, Advocate Claims settles Florida claims in a way that does not leave the homeowner or business owner holding the bag for under-paid claims.