Homeowner's Academy

This is your guide to interesting facts, tips and general homeowner information. We hope you find the information useful - and feel free to share with friends!

The Downside of Calling a Restoration Company After a Water Emergency

by BROOKE GOLD HASSON | Oct 06, 2015

WaterRestorationFraudFrom burst pipes to leaky appliances, there’s nothing worse than coming home to a water emergency… or is there?  

In recent years, we’ve witnessed some disconcerting trends among water remediation and restoration companies that are costing Florida home insurance companies and policyholders… and the problem is only getting worse.

Assignment of Benefits Abuse

In an effort to streamline the payment process between insurers and general contractors, Florida passed a law permitting homeowners to fill out an “Assignment of Benefits” form so they wouldn’t have to pay for repairs up front.

Unfortunately, shady contractors have used this law to take advantage of Florida homeowners. Before making repairs, these contractors require the homeowner to sign a broadly worded contract. Then, they overstate the repair bill and work with trial lawyers to file hefty lawsuits against the homeowner’s insurer.

Another common problem occurs when homeowners call a plumber to repair a leaky pipe, faucet or appliance. The plumber refers the homeowner to a water remediation company (which typically pays the plumber a finder’s fee) to get rid of excess water and to repair damage. The water remediation company offers to make the repairs for minimal cost, in exchange for the homeowner signing over their right to pursue the corresponding insurance claim. The company inflates the bill and files an exorbitant lawsuit against the homeowner’s insurer. 

How big of a problem is assignment of benefits abuse?

Former Florida Insurance Consumer Advocate Robin Westcott warned that assignment of benefits abuse raises homeowners’ insurance rates by nearly 20 percent each year.

Beware of Unlicensed Contractors

If it sounds too good to be true, it probably is. We’ve seen a rise in unlicensed contractors, who often post low bids to entice homeowners, and then cut corners to make a quick buck. Instead of providing quality service, these contractors conduct fast, sloppy work and charge for falsified damages.

In some cases, these crooked contractors will demand advance payment, usually in cash, and then leave the job unfinished. According to Detective Jan Cary of the Florida Insurance Fraud Division, “hundreds” of unlicensed contractors target unknowing homeowners looking to save some money on repairs.

Selecting a Reputable Contractor

Fortunately, there are steps you can take to ensure you select a contractor you can trust to get the job done right.

  • Don’t rely on ads. Consult with friends and neighbors who have had similar repair work done.
  • Search prospective contractors on the Better Business Bureau website. Several complaints and a low rating are potential indicators of shady business practices.
  • When reviewing references, verify that the contractor is insured and licensed to do the work. 

Consumer Reports also recommends being on the lookout for the following red flags when considering a restoration contractor:

  • Their address can't be verified and/or is not listed in the telephone book.
  • They are not affiliated with any recognized trade association.
  • Their license or insurance information cannot be verified.
  • They won’t provide references for similar jobs done in your area.
  • They offer a substantial discount, but don’t state the total cost of the repair.
  • They use scare tactics to pressure you into signing a contract.

Policyholders - In the Event of a Water Emergency… Call People’s Trust First

Our affiliated general contracting company, the Rapid Response Team, is ready to deploy 24/7* to mitigate water damage to prevent further loss. With just one phone call, they can be there to make emergency repairs in the event of a covered claim.

With more than 300 employees, the Rapid Response Team is Florida’s largest insurance restoration contractor. They will respond to any home insurance-related emergency and provide outstanding repairs for almost any everyday claim with an unparalleled 3-year, 100% customer satisfaction guarantee.

This service is already included as part of the People’s Trust policy*, and it’s why we ask all policyholders to “Call Us First!” at (877)-333-1230 to report a claim.


*24/7 Emergency Response from the Rapid Response Team is available only for People’s Trust policyholders and their covered losses. Rapid Response Team (FL-CGC#024735), an entity affiliated with People’s Trust Insurance Company, may coordinate or provide all repair services in conjunction with our Better Way approach. Participation in the Better Way approach requires the selection of the Preferred Contractor endorsement form, E023. Our Better Way approach is subject to policy and product terms, exclusions and limitations. Availability and coverage levels of some plan features are subject to state laws and underwriting requirements. Coverages, discounts and features subject to individual eligibility and to availability. Coverage exclusions and limitations may apply. For more information on this insurance and related programs, contact People’s Trust Insurance.