TARGET 8 Homeowners pocket insurance money local business suffers

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COLUMBIA - A local cleaning company is washing its hands of dirty business, but probably not for the last time.

Kit Price, the owner of Robinson's Cleaners in Columbia and Jefferson City, said her business specializes in fire and flood garment restoration. In 2016, Robinson's Cleaners sued six different individuals for a total of nearly $20,000 for not paying for their disaster cleanup bills.

"The insurance company has paid the homeowner directly for those items, and the homeowner for whatever reason either decides to spend that money on something else or spend it how they see fit," Price said.

Price said several times a year homeowners pocket insurance money instead of paying her. She said the family-owned business tries to operate on honesty, but her faith in others isn't always her best fortune.

"What we try to do is not deliver that stuff until we know where the check is, so we know that this is the money, or where the money is," Price said. "Sometimes that's just not an option. If you have a homeowner in need, you want to get their stuff back to them as soon as possible."

The Target 8 Investigative Team called a dozen other specialty restoration companies in the Midwest to see how big the problem is. Most businesses that restore carpet and infrastructure said they don't have this issue because insurance companies usually include those companies on the insurance check, which is referred to as a "two party check." This means a homeowner would not be able to deposit that insurance check into his or her bank account without the restoration company first signing off.

Garment restoration companies, like Price's, typically refurbish smaller pieces of property like clothing and rugs. These types of businesses told the Target 8 Investigative Team they're always chasing money because they aren't often included on the insurance check.

Jay MacLellan, the Public Relations Director for Shelter Insurance, explained that banks and mortgage companies are also more likely to have the protection of two-party checks.

"In an instance where there's a lender or a mortgage company or something like that, that has a secure interest in that property, certainly that is added to that insurance check as well so that both parties are covered in that instance," MacLellan said.

The result is protection for bigger, wealthier, businesses and banks, but hardly any protection for small businesses like Robinson's.

The Target 8 Investigative Team also reached out to the Missouri Department of Insurance to find out if there are any state-level regulations that protect businesses. Grady Martin, the department's director of administration and technology, said it's primarily up to insurance companies to decide how to write checks.

"Insurance policy provisions would dictate how the insurance company will pay and may specify who checks might be made payable to," Martin said.

He added, "The department is unaware of any insurance laws regarding who checks are made payable to."

Robinson's Cleaner's said its business is often left with a mess it didn't make, but did already clean up.

"I still have [one customer's] clothes," Price said. "But I don't want her clothes. The service is fine; she just decided not to pay me."

Despite Price suing for tens of thousands of dollars last year, she said the legal process is more time consuming than it is financially burdensome.

"I'm a business owner, I'm the only one that does that," she said about resolving lawsuits. "It just takes up a tremendous amount of time."

Price said three lawsuits settled out of court. Robsinson's won two of the other three cases that made it to the courtroom.

"One of them I couldn't get a hold of, so that person fell off the face of the earth," Price said. "And then, you know, I've got two that I filed suit and I actually got to win."

Another Missouri restoration company said it recently received a check for thousands of dollars that bounced. The company said it doesn't expect to ever see that money.