Finalist for Citizens managed repair program purchased by global claims management firm

Jan. 06--First Choice Repair, a finalist to operate a managed repair program aimed at curbing claims abuses by Citizens Property Insurance Corp. policyholders in South Florida, has been acquired by Vericlaim, a global provider of loss adjusting and claims management services.

First Choice Repair is a Jacksonville-based network of contractors who handle repair claims on behalf of large insurance companies. While the company does not identify its insurance clients, websites of several network contractors say they handle claims for Allstate, Farmers, American Family and The Hartford.

The acquisition was announced less than three weeks after a Citizens evaluation committee selected First Choice Repair as a finalist to create the state-run insurer's new managed repair program.

According to plans outlined by Citizens executives, the managed repair program will at first give policyholders discounts on their premiums if they agree to allow their damage claims to be handled by a group of pre-approved contractors. By 2017, policyholders would be required to select from Citizens' contractor list, if state insurance regulators approve.

Terms of the acquisition were not announced in a news release by Vericlaim, a Napier, Ill.-based subsidiary of Sedgwick Claims Management Services Inc., which is headquartered in Memphis, Tenn.

Asked by email Wednesday whether the acquisition was tied to First Choice Repair's selection by Citizens as a finalist, Segwick public relations director Catherine Bennett responded, "The addition of First Choice Repair allows Vericlaim to offer a more robust response to property events and is a strong asset to the organization."

The Vericlaim news release said First Choice's network consists of "hundreds of credentialed contractors, many of whom operate in the roofing, siding and gutter sector" throughout the U.S.

In a statement, Vericlaim CEO Michael Arbour said First Choice complements Vericlaim by giving it the ability to "offer a more robust response to high-frequency, low-severity property events resulting from catastrophes or daily claims." Vericlaim, Arbour said, was built "on expertise in field adjusting for complex, high-severity property loss claims."

Vericlaim has offices in Miami and Boca Raton. Sedgwick has offices in Hollywood, Pompano Beach and Hialeah.

First Choice Repair was founded in 2003 and operated by Triage Management Services. The founder of Triage, James W. Southerland, pioneered the concept of managed repair in 1994 when he founded the PRISM Network, according to a biography posted on First Choice Repair's 2013 Annual Convention website. PRISM Network was sold to Crawford & Company, which now operates a managed repair company called Contractor Connection and its network of more than 4,800 contractors.

Contractor Connection also was selected as a finalist to run Citizens' managed repair program. The two other finalists are BrightClaim, a claims management services provider headquartered in Atlanta, and Servpro Industries, a water and fire damage restoration company with independent franchises throughout the U.S. and 16 locations in the tri-county area. Citizens invited companies to submit proposals in September.

Negotiations with the finalists are underway, Citizens spokesman Michael Peltier said Wednesday.

Citizens' program is intended to stem increases in what the insurer calls fraudulent claims and excessive litigation, primarily involving water damages in South Florida. Citizens says repair companies persuade policyholders who suffer water damage emergencies to sign over their rights to pursue payment, then complete expensive repairs or file lawsuits demanding inflated fees before Citizens is notified of the claim.

However, attorneys who specialize in representing homeowners in suits against Citizens and other insurance companies counter that the insurer is often too slow to send adjusters to inspect damages or refuses to approve fair settlements to restore properties to their pre-loss conditions.

Citizens' plans to create a managed repair program is opposed by the Florida Association of Public Insurance Adjusters, which says contractors in managed repair programs tend to comply with insurance companies' desires to perform work as cheaply as possible.

In addition to the managed repair program, Citizens is seeking state approval for numerous policy changes, including coverage reductions for water damage repairs and a requirement that policyholders notify Citizens within 72 hours after damage occurs. The proposed coverage limits are opposed by the Florida Association for Insurance Reform.

[email protected], 954-356-4071

___

(c)2016 the Sun Sentinel (Fort Lauderdale, Fla.)

Visit the Sun Sentinel (Fort Lauderdale, Fla.) at www.sun-sentinel.com

Distributed by Tribune Content Agency, LLC.