Pricing Homeowners Claims Estimates
Last week the Texas Supreme Court held that recovery of medical or health care expenses are limited to "the amount actually paid or incurred by or on behalf of the claimant," precluded the introduction of evidence of medical bills that had been billed to the plaintiff but that the plaintiff was not obligated to pay.
So what does this have to do with homeowners property losses?
Everything! 
The ruling which can be found here for you legal eagles, essentially deals with the difference between "list prices" for medical services, and the "negotiated prices" that most healthcare organizations pay.
The fact is that in homeowners losses the exact opposite occurs. Insurance carriers pay indemnity based on list prices with no regard for what the homeowner actually pays - which is usually less.
In other words, pricing is being set artificially based on a black box algorithm controlled by 3 or 4 estimating software companies.
One alternative is bringing the concept of direct repairs for homeowners property losses and a managed repair network into the policy.
In the event that a homeowner wishes to retain their right to have the repairs done by the person or entity of their choosing, based on pricing derived from estimating software, they are free to do so. However, in the event that they are willing to select at the time of renewal the option to utilize the carrier's managed repair network, they receive a discounted premium and reduced deductible.
The concept is straight-forward. If carriers through service partners such as Service247 can reduce claim costs, these can be passed through to policyholders. A win-win for everyone.
Any way you slice it, whether in healthcare or homeowners, indemnnity should be limited to the amount actually paid or incurred versus hypotheitical pricing that ultimately ensures that insurance carriers pay the highest possible amounts for any given item.
