As Judy Ruddy walks around her gutted home, she sees family photos and heirlooms tossed around and boxes piled high both in her driveway and in her living room.
"I can't even come in here and think clearly. It's just been a nightmare," said Ruddy.
It started last November with a shower leak.
"We had buckling of our wood floors," explained Ruddy.
They're now gone, and everything else.
"I think, 'how did it get like this from a small leak 20 feet away to a disaster?' " asked Ruddy.
A disaster Ruddy can do little about because her insurance company put the claim in its managed repair program. That's when the insurance company chooses the contractor or gives you a list of approved vendors to choose from. Insurers say it keeps rates low, but critics say it's about cutting costs.
"We take the time and hassle out of dealing directly with contractors," said Florida Peninsula founding member & Chief Legal Officer, Stacey Giulianti, Esq., in a YouTube video. "Our workmanship is guaranteed for a full three years."
Florida Peninsula sells you on the fraud protection.
"Because we pay the contractor directly, there are no surprises on the final bill," Giulianti continues in the video.
At a 2014 insurance conference, Florida Peninsula sold managed repairs as a way for carriers to get "more control over the expense." They said the program saved almost a million dollars on less than 1100 claims. They also say it takes 45% less time to reach an agreed price between the homeowner and the insurance company.
These savings, insurers say, help keep premiums low. One attorney we spoke to had a different opinion.
"The incentives are all in the wrong place," explained attorney Jill Henniger Bowman of the Stockham Law Group. "The contractor and the insurance company have the incentive to keep the claim small. The contractor so he can keep getting the insurance work and the insurance company so they can make money for shareholders."
Some insurers even use affiliated contractors.
Rapid Response is the contractor for People's Trust Insurance company. They share common ownership.
"So if I can control and own the whole process and make sure I reap the profits of all of that, what does that do to the homeowner? It takes them out and eliminates their rights," explained Henniger Bowman. "The insurance company is hijacking their claim."
People's Trust says it sees Rapid Response as a benefit to policyholders and competitive advantage. They say they fully disclose the program when you buy a policy.
The insurer points out the attorneys and public adjusters trying to discredit the program make no money when claims are handled through managed-repair programs.
Homeowner thoughts on program
Both People's Trust and Florida Peninsula say their customers are happy and share testimonials on their websites.
"I'm over the top. Over the moon. This program gave me my home back," explained a Florida Peninsula customer identified as Ellen.
Florida Peninsula said their customer satisfaction surveys show 88% of homeowners were satisfied with the work done under the program.
Other customers have written to the state about their experiences. They paint a different picture of the program.
One homeowner told Florida's Chief Financial Officer that the first contractor "attempted to push inferior materials under the amount allowed by the insurance claim."
Another homeowner wrote, "The first contractor they hired abandoned the job and their work had to be torn out in any case."
As for the second contractor hired by the insurance company, "The job is about 60% complete. We cannot get anyone, not even the insurance company adjuster, claims manager, or restoration company to call us back."
Henniger Bowman said five of the top 25 insurance companies in Florida are using managed repair type programs.
"What we are seeing is managed repair is not working for Florida homeowners," Henniger Bowman explained. "They are stuck with bad repairs. They're stuck with substandard work, and substandard quality of product put back in their homes. A lot of times they [the consumer] feel powerless."
Ruddy's testimonial details the long list of problems she says she's encountered.
"It's been so overwhelming, and a horrific comedy of errors," explained Ruddy. "They stepped through my ceiling."
She also said the mold removal was done twice, something she says she pushed for after getting sick.
"It's managed repair, but I'm the one managing it," Ruddy explained.
While Florida Peninsula says it shares in Ruddy's frustration, the insurer said it manages the claim daily.
The company wrote in a statement, "We have worked diligently with Ms. Ruddy to get her damaged home back to its original condition. Unfortunately, her home had a serious mold problem that took more than three months and two contractors to remediate. This combined with a public adjustor being hired mid-stream and a lengthy local permitting process caused significant delays."
Ruddy said she hopes the work is done soon.
"I think it's a bad dream, and I'm going to wake up from this and it's going to be some nightmare you had but it's not," Ruddy said.
Ruddy's attorney recently put Florida Peninsula on legal notice as the attorney and homeowner believe the property has not been fixed in a reasonable amount of time. They feel it will take more money than offered to fix the home.
Check your policy
Florida Peninsula requires you use managed repair for claims. However, they give you a choice of contractors. They say you're given three contractors, and if none of those are acceptable you can choose from other approved vendors.
People's Trust gives you the option of using the program in exchange for a 5% discount on your premium. You opt in or out of the program when you buy your policy.
Make sure you read your policy carefully so you know how your claim will be handled. Look for words like managed repair, right to repair, and preferred vendors.
Florida Peninsula Full Statement:
"We have worked diligently with Ms. Ruddy to get her damaged home back to its original condition. Unfortunately, her home had a serious mold problem that took more than three months and two contractors to remediate. This combined with a public adjustor being hired mid-stream and a lengthy local permitting process caused significant delays. We empathize with Ms. Ruddy and share her frustration and are committed to getting her back into her home as soon as possible. Florida Peninsula has stood by Ms. Ruddy and voluntarily exceeded its policy limits on her living expenses and mold remediation costs.
Florida Peninsula introduced its Managed Repair Program in 2010 offering homeowners more than 150 vetted and preapproved South Florida contractors providing quality work and a three-year warranty to back it up. Every homeowner making a claim is provided with the names of three contractors to make a choice. If none of those three are acceptable, they are provided with other approved contractors. Since 2010, we have repaired more than 6,000 homes. One hundred percent of homeowners making claims with our company also received a follow-up survey to determine their experience. Of those who answered these surveys, 88% of them were satisfied with the work performed under the program.
Our managed repair program takes the pressure and risk off homeowners, most of whom do not have the expertise or desire to select and manage contractors; nor do they have the leverage to obtain a longer warranty backed up by a reputable insurance company."
People's Trust full statement
"People's Trust and the Rapid Response Team are affiliated companies with common ownership. The focus of Rapid Response Team is to meet the needs of People's Trust policyholders, making emergency repairs 24/7, fully managing repairs and restoration and maintaining a network of response centers around the state for everyday and catastrophic response and recovery.
We are very upfront about the role of Rapid Response Team. We see Rapid Response Team as a significant benefit for policyholders and a competitive advantage so we prominently feature our simplified claims and repair process on our website and in other advertising. In addition, our managed repair model is verbally discussed during the sales process. This is followed by identifying the managed repair program endorsement on the policyholders' declarations pages and providing the approved endorsement form. We also provide our policyholders with a "welcome kit" that describes the process.
We are not able to speak to consumers' experiences with other insurers. We note, however, that some other repair programs rely heavily on third-party contractors to oversee the remediation and repair processes. Our organization is different in that we have invested millions of dollars in Rapid Response Team, establishing warehouses in key locations and stocking them with essential materials. Rapid Response Team employs hundreds of people who take direct responsibility for performing and overseeing repairs. By performing these services through people employed in our organization, we believe most of our customers have positive experiences as indicated by the testimonials on our website."