News Alert, Sept. 14, 2013, Morning Edition, #RealEstate +

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  1. Insurance Fraud Not Limited to U.S. Market | PropertyCasualty360News Alert, Sept. 14, 2013, Morning Edition, #RealEstate +

    This is a great thing for the insured(s) (the party or parties covered by the insurance).

    One significant change first emerged in the UK over 20 years ago, where insurers attempted to reduce claims leakage and fraudulent ‘scope creep’ by directly repairing damaged buildings or replacing lost goods, rather than allowing the policyholder to have control over the fulfillment process. This new model replaced the traditional approach of the policyholder providing three estimates for repair (often provided by the same building contractor, using different letterheads).

    The approach also had the secondary benefit of providing additional customer service at a time of extreme anxiety. This approach remains in place, and as a result the UK P & C insurance industry has evolved to develop new capabilities especially in procurement and supply chain management.

    The model is best described by example. In the event of a policyholders home being damaged (or even destroyed) by fire, the insurer will directly appoint the restoration company to do the cleaning and debris removal; the insurer will directly appoint a surveyor or engineer to design and supervise the repairs in accordance with local and national standards; and also directly appoint the contactor [sic] to carry out the work itself. The restoration company, surveyor, and contractor are retained all by the insurer under a term contract—perhaps 12 or 24 months—to carry out the work usually at discounted rates.

    We can’t give you statistics for how prevalent this is in the US; but, as an insurance brokerage (insureds’ agent rather than carriers’ agent), PropertyPak™ wants you to know that the very ending there is the place where the insured has reason to be cautious. The insurance policy can have various limits. If the insurance company or carrier doesn’t choose the best providers {restoration company, surveyor, engineer, architect, contractor(s), etc.} for the money and doesn’t do a solid job of monitoring the schedule, work, materials, and everything else required under law and the contract documents, the insured could reach a limit set in the insurance policy where with different providers, the insured may not reach that limit or may reach it with more work having been accomplished for the money.

    That said, a great place to start the decision-making process concerning whether or not to go with this insurance format is with the carrier’s reputation and rating. (A.M. Best Company is the insurance industry’s standard rating agency.) A carrier with a solid record handling this process will likely do a decent job going forward of watching costs for all concerned. You might also check the providers via various private and governmental entities, such as the BBB (Better Business Bureau) and licensing agencies.

    Read the source article …