The War Against Managed Repair!

While I write these words millions of homeowners are still mopping up after Hurricane Matthew. Some have lost their homes. Others their lives.  Concomitantly, after meticulously implementing their Cat Plans, Florida insurers, agents and emergency personnel of every breed worked, literally 24/7, to return property and persons to pre-storm condition.  (See Note #1 below)

Shameful that too many responders are of a different persuasion–Matthew is to them, what the civil war was to carpetbaggers—a disgraceful occasion to profit.

Always in the name of consumers!

Part 1–The Combatants

As Matthew churned up the Bahama’s some attorneys churned out adds to their cottage constituents.  But, they were not informing water extractors and roofers on how to protect their businesses so they could focus on storm victims.  To the contrary.  It was to confirm that their “… contracts [were] in order.”  And, to be certain they had “the most up-to-date language for Assignment of Benefits”.

All as a means to say, “call us if your bill isn’t paid” and, of course, to spread the implied subtext: “our inflated legal fees force the payment of inflated invoices!”

Always in the name of “Justice!”

Any list of “unscrupulous building contractors” referenced in the August 31st  Palm Beach Post editorial and the “shady repair firms” blamed by the Consumer Protection Coalition, should certainly include any public adjuster who, on the eve of a Cat-4 monster, widely distributes an anonymous fax with this declarative accusation: 


But the above ad, mistakenly faxed to numerous insurance agents, bares no hint of the authors true proposition. This practicing, and purportedly state licensed, public adjuster, promises consumers more than their insurance policy provides. He won’t allow his 20% fee (the max permissible and the highest in America) to cut into the claim payment because he’ll retrieve “more than enough” to cover the fee and “… a little something extra” for “unanticipated” expenses.  Call me cynical but, I think “unanticipated” was code for an expense that actually should be anticipated, namely the deductible.

I believe this is true.  He told me so when I called.  He told me who he worked for.  He said his name was Adam. He was very polite.   (See Note #2 below).

Water extractors like United Water Restoration (UWR) are stepping up their assault, as well, with referral fees paid to anyone (especially agents) who can get UWR an audience with a water claimant.  See UWR’s Hurricane Matthew flyers here.  These circulars fell on the heels of yet another expose’ by Channel 9  on what sometimes happens when UWR’s foot actually wedges in a vulnerable homeowner’s door.  One agent got a full explanation of exactly how IRS calculations are made when the, uh, “kickbacks” are paid.  You decide–See Note #3 below.

And, media warnings make it sound like Florida’s climate of fraud is getting worse.  The OIR, the DFS and the Insurance Consumer Advocate jointly cautioned all Floridians to watch out for “fly-by-night repair companies”;   Channel 9 ACTION NEWS did a piece on, What to Avoid when Contractors Come Knocking”;  editors at the Daytona Beach News Journal declared that consumers need to be protected; so, too, did   St. Peters Blog; and on and on and, well…you get the picture!

Is this what Florida’s claims landscape has come to? Public Adjusters, attorney’s, “unscrupulous vendors;” badmouthing insurers, trolling every disaster to squeeze whatever they can from a system designed to help others?

I’m sad to say the answer is “yes”.

Florida has earned a reputation as host to the most fraudulent property claims system in America!

Part 2–Battle Lines

And, that’s why Florida’s property carriers have retreated to managed repair. It’s a refuge from Florida’s triple axis of fraud: one-way attorney fees, the nation’s worst bad faith climate and, the worst consumer abuser of all; Assignment of Benefits (AOB).  No other state has any one of these as bad Florida.  And, Florida has all three.

Partly as a means to keep their customers from being kidnapped by an attorney, a public adjuster, or shady vendors, a growing number of Florida’s top twenty-five carriers are using managed repair–Florida Peninsula, Heritage, Olympus, Tower-Hill, just to name a few.

Citizens, which in some zip codes has 90% of its claim notices coming from trial lawyers or public adjusters, had no choice but to adopt managed repair and its “Call Citizens First” initiative. See, Citizens Warns Policyholders.

Citizens is the perfect example of a carrier reacting to an abusive consumer threat by using managed repair. (See Note # 4 below)

That’s why managed repair is under attack—it’s not only popular but, it’s effective.  It puts the abusers out of business.

And their weapons of preference? In addition to frivolous litigation, it’s the media.

Tower-Hill, Florida Peninsula, People’s Trust Insurance (PTI) and others have all been victimized lately by the trial bar’s double whammy:  a lawsuit accompanied by vilification in a lop-sided news story.  

But no carrier is more vulnerable than PTI.  It first brought managed repair to Florida’s property market and pioneered the concept of insurer assisted repairs with its Rapid Response Team (RRT) approach.  I admit to having doubts about a carrier maintaining its own materials, employing workers and contractors to dispatch to the scene of every loss.  But, RRT has stood the test of time and if it also stands the test of Hermine and Matthew, well…I’ll admit I was wrong.

Till then, along with any carriers who follow its lead, PTI must withstand attacks like those in the TV news coverage titled: “Managed Repair: Cutting Corners or Cutting Costs” .

While this reporter gives what she believes to be both sides, Attorney Jill Henniger Bowman calls managed repair the “hijacking” of the policyholders claim.  She says policyholders suffer because managed repair “eliminates all their rights.”  And, speaking of lop-sided, read Jill Henniger Bowmans unfair and unbalanced accounting of managed repair as published by, guess who, the American Association of Public Insurance Adjusters (AAPIA) here.

Just like the news story there’s never a mention of Assignment of Benefits or of attorney fees or of how a public adjuster may be the reason the claim was delayed in the first place.  (See NOTE #6 below). 

I believe PTI was victimized.  Not because its RRT doesn’t work but because, so far, it works too well.  And that’s the dilemma for plaintiff’s attorneys, “unscrupulous” vendors and public adjusters:  What would happen if all carriers adopted managed repair, or worse, a facsimile of the RRT approach?

Now watch this video titled “Repair Nightmare” from WINK News.  The reporter conducts several interviews, including one with the homeowner and another with Senator Lizbeth Benacquisto, Chair of the Senate Banking and Insurance Committee.  And, she even quotes a response from PTI’s PR firm. But, not a word about the fees that might motivate attorneys or public adjusters to file frivolous suits or claims.  That’s despite PTI’s request that such an angle be considered. You can decide the validity of the suit by reading either the Original Complaint or PTI’s Counter Claim.

But, keep in mind that all of this was in the face of yet another public adjuster, Tia Fijalkowski’s, bad mouthing an insurer’s managed repair program.  Excerpts from Fijalkowski’s Facebook page provide an ugly glimpse at both her prejudice and veracity, in my opinion:

“Peoples Trust is a modern day plague on homeowner’s insurance, their right to repair language needs to be investigated…They don’t even bother to send an adjuster they let Rapid Response who is owned by them and usually not so rapid in their response to adjust the claim, decide what’s damaged, then make the repairs as cheaply as possible!  Here’s the rub if you have this policy you have no choice!”

With respect to this specific claim, what’s clear to me is any allegation that a PTI policyholder doesn’t know they are in the RRT program is dubious at best.  PTI even told the reporter:

The Willekes have been our policyholders for nearly three years and as such they have received clear disclosures (see attached declarations page) about our managed repair service.  They proactively agreed to accept this claims model as part of their contract and it is important to recognize that each year they have received a premium discount in consideration. (See attached declarations page).”

To know what PTI thinks about public adjuster Tia Fijalkowski’s involvement, See Note #7 below.

For what it’s worth, I believe that PTI (and other insurers) are being targeted by a few public adjusters and attorneys because their managed repair program threatens their livelihoods, not for any other reason.  This blog contains only a few examples that confirm this theory.  There are also organizations of contractors and lawyers working to eliminate managed repair; see the one sided petition against managed repair from the National Insurance Restoration Council (NIRC) which calls managed repair “Insurance Corruption.”  And, see whom it fronts for via the articles of incorporation, here.

The irony is that managed repair wouldn’t even exist if it were not for the actions of those who now, so vociferously, object to it.

Don’t get me wrong, managed repair needs to be managed properly and improved at every available opportunity.  But, the media must begin to fairly report the motivations and incentives of all sides to the complicated managed repair equation, not just the one side that is out to gain from its destruction.

Thanks for reading this far.


NOTE #1: Property data firm CoreLogic estimated Saturday that insured losses on residential and commercial properties will be between $4 billion and $6 billion. The estimate covers storm surge and wind damage, which CoreLogic anticipates will account for 90 percent of insurance claims related to the hurricane.  Florida policyholders filed about 34,300 insurance claims since Sunday night October 10th, bringing the statewide total through Wednesday morning October 12th to 39,302. according to the state Office of Insurance Regulation.

So far, 76.1 percent of all claims were filed in five coastal counties in the northern half of the state: Volusia (11,955); Duval (6,536); Brevard (5,499); St. Johns (3,654); and, Flagler (2,273).

Note #2: I forwarded the solicitation, which I believe might involve at least three violations of the insurance code, to the Department of Financial Services (DFS).  See if you think I’m right by reading the ad here.

NOTE #3: One of the agents receiving the PA solicitation also sent me an email about a visit to her agency by the person delivering flyers regarding “referral fees”:

“As per your request here is a copy of the solicitation that was BROUGHT IN to my office regarding $1000 commissions for referrals. While she was here I was asking how the program worked and asked about a 1099. She replied that they don’t issue the 1099 and that they actually pay $1350 and they pay the taxes for me which is why I receive $1000. (interesting concept – wonder how they are going to pay taxes for me when they don’t know my tax bracket or even my ss # to pay on my behalf). She also stressed that it was important for me to call her on her cell # to make sure that I get credit when the person I refer signs up with them.  My Spidey senses were tingling, but I just said thank you and sent her on her way of course keeping the lovely brochure she gave me with all their information.

On a side note the flyer says that they are BBB accredited business, but when I looked them up it showed that the BBB accreditation was revoked 01/22/2016 due to “engaging in activities reflecting poorly on the BBB or its members”.    Anyway, I’m sure none of this is news to you and only hope that this helps to bring an end to this growing problem.”

NOTE #4: Citizens is engaged in two initiatives regarding post claims solicitations by third parties: one, to get claimants of all types to call the company first, and; two, a managed repair referral approach that has now been limited to water losses, where Citizens has been experiencing its most prominent fraudulent claim inflation.  Read a Sun Sentinel article here. Read Palm Beach Post article here.

NOTE #5: PTI also encountered favorable TV news coverage in the wake of Hurricanes Hermine and Matthew.  Some can be found on its website or YouTube, as follows: WFTV Channel 9; Simply a Better Way;

NOTE #6:  Based on my inquiries I learned that this was a water damage claim in which the insured hired a PA from the outset, and in which the insured hired an attorney and filed a Civil Remedy Notice (CRN) barely more than 30 days into the loss.  The claim is in litigation, so PTI is restricted in commenting.  Nonetheless, it apparently sent its mitigation team immediately, inspected the property, and sent a coverage determination/proof of loss/scope promptly.  Most people are very happy with PTI’s RRT program.  And, it certainly has every incentive to repair to the full scope of loss (or more).  Even further, PTI has an appraisal process specifically for questions of scope, which it informs policyholders about at the beginning of the process.  Thus, there’s no legitimate reason a question of scope should hold up the process.  The only reason this happens is when an insured and/or his PA/attorney want to circumvent the repair process and want to extract a cash settlement, in my opinion, of course.

NOTE #7:  In an email to Reporter Lindsay Sablan PTI stated the following:

  1. “When you understand the public adjuster Ms. Fijalkowski’s financial self-interest, her bias against our business model will make perfect sense. Ms. Fijalkowski only gets paid if the insurance company writes a check to the insured.  She receives no money if we repair the insured’s home, as provided under the Willeke’s insurance contract.  The public adjuster and the homeowner’s attorney are incentivized to block our ability to fulfill our obligation under the contract, and that is exactly what they have done.”
  1. “Unfortunately, many public adjusters and trial lawyers are promoting their own financial interests in the guise of helping consumers. By artificially inflating claims, this is actually having the effect of driving up insurance costs for everyone in Florida even in the absence of major storms for more than 10 years.”
  1. “In our estimation, the restoration would already be complete if Ms. Fijalkowski, the Public Adjuster, had not blocked the repair process for her own financial benefit.  Based on Ms. Fijalkowski’s Facebook posts (see attached), she has a strong and misinformed bias against People’s Trust, maligning the company, a solid corporate citizen that proudly employs more than 650 Floridians in our family of companies, as a “modern day plague on homeowner’s insurance.”
  1. “She clearly reveals her strategy to drive up claims costs so that she can make money, which is ultimately having the effect of elevating insurance rates (“even after a settlement has been received by the insured, a public adjuster may be able to negotiate for a higher amount. Public Adjusters work for you the policyholder not your insurance company.  They work on commission…If you don’t get paid the public adjuster doesn’t get paid, there is no out of pocket fees.”)

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