HB 1310 Will Require Accurate Claim Settlements To Georgia Policyholders

HB 1310, also known as the “Protect My Home” law, has been introduced in Georgia.  If passed, this bill will amend Chapter 32 of Title 33 of the Official Code of Georgia Annotated to ensure fair claim payment to policyholders. With 16 sponsors, this bill has the potential to transform the property damage claim process and level the playing field against big insurance companies. Read on to learn about each proposed change and how to get involved. 

 

HB 1310 Will Require An Appraisal Provision 

In Georgia today, the appraisal process is often unavailable to policyholders because of discrepancies in the cause of loss or the scope of damage, regardless of how small those discrepancies are.  When an appraisal is unavailable to resolve disputes between insureds and their insurance carriers, insureds are left with no other option other than to hire legal counsel and pursue formal litigation. 

Typically, an insured can expect legal fees to cost $400-$500/hr on an hourly basis or anywhere between 30% and 40% on a contingency basis of their overall claim value, in addition to other costs of litigation.  This disincentivizes the most vulnerable policyholders from being able to secure proper counsel.  For claims under $50,000, you simply cannot find lawyers to take these cases.  This is clearly against public policy.  An appraisal is a faster and less expensive way to resolve disputes and must be made practically available to insureds.

 

Provide Guidelines For Appraisal & Scope Of Loss

HB 1310 would also provide further clarification regarding the purpose of the appraisal. Under the language of the new bill, the appraisal process would allow appraisers and umpires to determine the cause of loss, repair cost, replacement cost, and loss in value of the property. As the law currently stands, the limited scope of the appraisal renders it generally ineffective and leads to unnecessary litigation. 

 

Define Guidelines For Calculating Depreciation 

This bill would require carriers to calculate depreciation “based on a combination of objective criteria and subjective assessment, including the actual condition of the property prior to loss,” rather than their existing, arbitrary methodology.  

 

Prohibit Managed Repair Programs 

The current practice of insurance companies’ referrals to Preferred Vendors and PSPs hinders the free market of restoration and construction services by allowing insurance companies to coerce insureds into using Preferred Vendors or PSPs. HB 1310 will require an insurer to disclose that an insured policyholder is not required to use the Preferred Vendor or PSP recommended by the insurance company.  This is a clear conflict of interest, yet managed repair remains in many states around the country with predictably bad results to the insureds.  Carriers are incentivized to unilaterally control the scope of work, negotiate lower repair costs and choose the cheapest contractors, without any input from the property owner.  

 

Require Payment of Overhead & Profit 

This bill would require insurers to pay the cost of a general contractor when a contractor’s services are reasonably foreseeable, or if the insured hires a general contractor to oversee the repair of the property.  Overhead and profit is calculated during the premium rating process, yet is routinely and arbitrarily denied by carriers.  

 

Require Payment For Consequential Damages

HB 1310 states: “insureds shall not be required to pay for betterment or any other cost except for the applicable deductible.” This bill would require the insurer to pay for the consequential damages incurred when making repairs to the damaged insured’s property.  Integrating old materials with new materials can pose a lot of issues during the repair process.  This would give serious consideration to performing full replacements as opposed to patchwork, unsightly repairs.  

 

Require Uniform Matching

Most insurance companies in Georgia do not pay for a reasonably uniform appearance of materials, causing unsightly repairs to damage. Rather than a homeowner’s repairs to damaged property seamlessly integrating into existing materials, a lack of uniform appearance protections has resulted in mismatched roofs, flooring, paint, and kitchen cabinets, to name a few. HB 1310 will ensure that property damage repairs are not unsightly and obvious. 

 

How To Get Involved

Insurance companies in Georgia have already started to protest HB 1310. We encourage all Georgia residents to get involved and ensure state representatives understand the importance of passing this bill. There are two ways to get involved: 

1. Click on this link and enter your zip code in the “address” search to find your local Georgia legislators.  Then send an email to each, asking them to vote “YES” to “Protect My Home.”
2. Join the American Adjuster Association. Our goal is to shed light on policyholders’ issues in the claims process and advocate for a fair and balanced claims system. Become a member and help pass legislation that protects policyholders. Contact us today to learn more or email mike@americanadjusterassocation.org.