1) Saving money - The fact is that there are ways to reduce the cost of home modifications when you “pay out” the costs to the insured. Knowing how to do so is the key. There is a fine line drawn with professional judgment as to the necessary scope of work. The scope must be “bare bones” without compromising the benefits provided in the policy. And the pricing must be accurate and specific to the written scope of work. Knowing how contractors create estimates will go along way in finding the hidden dollars that are responsible for the “fat” in the estimate. The insured is entitled to the cost, however they are not entitled to the profit. If you are planning to pay out, make your team aware of it from the onset.
2) Long term effects - It might make all the financial sense in the world today, but it can cost significantly more in the future. If the injured worker is going to be your responsibility for the long haul, “paying out” the home modification portion of the file is not recommended. Far too often the homeowner uses the funds for personal items and modifications are altered to what is now the reduced affordability. Before you hide behind the “tough luck” response, please consider what can happen. If the modifications weren’t completed as agreed, and the insured is inadvertently injured as a result, who is responsible for their medical care etc. Most likely the insurance company will be responsible to pay medical bills and odds are, you’ll be back at the modification process and write another check anyway.
3) Writing a check to pay out might give you the perception of saving money but the reality is that it might cost you more in the long run. If you choose to do so, weigh the options, consider the risks, and if you need a little help, don’t be afraid to ask.
Let me know how you’re doing!

Corey Staver

The David Corey Company

coreys@davidcoreycompany.com