After sustaining damage to your property that the insurance adjuster confirms as covered, the adjuster will then strongly suggest that you use a restoration service from their preferred list of vendors. They may or may not also inform you that you have the right to use a contractor of your choice to perform the repair work. Under the Insurance contract it is clearly outlined that the policy holder is responsible for the outcome of the “claims process”, however insurance companies’ routinely attempt to convince the insured to use an emergency restoration contractor from their vendor program.
Preferred Contractor Network?
Often referred to as a “Preferred Contractor Network” or “Preferred Service Provider (PSP)”; insurance companies entice the property owner with ‘time saving’ assurances, meaningless warranties and boasts of screening that is rudimentary at best. This business to business relationship with preferred restoration contractors is a subtle and effective tactic used to instill a sense of trust and confidence that in reality is a manipulation to control claim settlements aimed at saving insurance companies millions of dollars. Preferred vendor programs are a vehicle by which insurance companies limit payouts; such behavior amounts to insurance company abuses, the property owner being the ultimate casualty.
Restoration contractor participation in a “preferred vendor” program requires the restoration company to operate within the insurance companies guidelines that may include paying to be on the preferred vendor list, providing a vendor discount or rebate to the insurance company for each job, using limited estimating software that is often below market value, using a price list provided by the insurance company to appraise damages and working from an estimate prepared by the insurance companies’ adjuster. In short the insurance company controls the claims process and costing through the loyalties of their preferred contractors.
Restoration Company Loyalty
The ‘preferred’ emergency restoration contractor is going to follow insurance company protocol, which is virtually always to the property owner’s detriment. The insurance companies ‘preferred’ vendor will not share any recommendation that contradicts an insurance company adjusters scope of repairs even if they disagree with the adjuster’s findings, as the vendor does not care to jeopardize their standing with an organization that is feeding them work. Insurance companies select contractors based on their low cost repair valuations, not the quality of their work. Contractors on an insurer’s preferred vendors list agree to complete the scope of repair that was approved by the insurer at a price determined by the insurer.
The insurance companies goal is to save money by paying less to tear out, repair or replace damaged property and the ‘preferred’ contractors’ goal is to receive regular work and income in volume. Contractors operating within the confines of a preferred vendor program will be working at a financial disadvantage, they will be required to work for less than fair market value giving them no incentive to use quality products and procedures. In order to survive the ‘preferred contractor’ may resort to using inferior materials and unfavorable trade practices. Mold, lead and asbestos are often not properly addressed by restoration contractors working within the confines of a vendor network because the costs for materials and labor are much more significant due to the time consuming procedures that must be followed when dealing with hazardous substances. Such unaddressed liabilities puts the policy holders financial and physical health at risk.
Preferred Vendors & Restoration Service Outcome
Ultimately, the insurance company takes no responsibility for the outcome provided by their ‘preferred contractor’. If the policy holder hires the insurance company’s restoration contractor, the policy holder is held responsible for any problems or failures during the restoration process. The restoration and repair contract is between the insured and the contractor, not the insurance company and the contractor. For this reason, the regulations state that the policy holder be allowed to use the contractor of their choice.
Honest, reputable restoration contractors who are not willing to play the insurance company’s ‘game’ are penalized. Such contractors often are slandered, and are put out of business. These contractors are not allowed to compete. The insurance companies mislead their policyholders into believing that they must select the insurance company’s contractors. You, the insured, are entitled to use the restoration company of your choice. It is to your advantage to work with a non-insurance vendor who will report accurate findings on the scope of repairs that are necessary rather than doing the minimum to financially benefit the insurer.
The insured needs to have contractors who are not held captive by insurance companies and their cost containment priorities, to provide honest, reliable emergency restoration and repair scopes and estimates. The insurer’s main goal is cost savings therefore the scope of work is likely to be inappropriately less than what is actually required. If you have filed an insurance claim it is highly recommended that you not allow the insurer to determine the scope of work as opposed to a trained and qualified professional restoration contractor.
Property Recovery 911 works for you the insured, not your insurer. Remember you have the choice, do not allow your insurer to choose the contractor to perform the repairs for your loss. Unlike insurance companies we are not accountable to shareholders only to you. Don’t let insurance companies railroad you into using their restoration and repair contractor, you are entitled to use the contractor of your choice.