5 Reasons to Rethink Using Your Insurer’s Preferred Vendor or Contractor

The good news? You don’t need to use your insurer’s preferred vendor or contractor. Instead, you can use third-party contractors or even do the work yourself.

Here are some of the reasons to avoid – or at least rethink – using your insurer’s preferred contractors and vendors for a claim.

Cleaning Too Quickly Could Remove Evidence

Your insurer requires proof that you experienced a loss.

Some restoration companies are on-site within hours. They might start cleaning up water damage immediately, for example, and tear away damaged drywall or flooring.

That may sound good. Unfortunately, it also removes evidence of the loss.

Your insurer may require photos, videos, and other evidence of water damage. If a restoration company quickly removes damaged components, you have no proof you actually experienced that loss.

Some of the issues with a fast cleanup or restoration include:

• No photo or video evidence of affected items
• Failing to document damage on all surfaces or hidden surfaces (say, behind walls and under flooring)
• Ripping out materials or components before verifying they’re covered

Contractors Align with Your Insurer’s Needs Instead of Your Own

Restoration contractors and cleanup crews often make big money through insurance claims. The sooner they arrive on-site and get started, the sooner they get paid by the insurer.

Many contractors promise to work directly with your insurance company. That may seem like a good thing. After all, your insurer and contractor should be on the same page, right?

Unfortunately, it’s not always a good thing. Your insurer, your contractor, and you have different needs:

• Your insurer wants to close the claim as quickly as possible to limit scope and reduce the chance of finding extra damage
• Your restoration contractor wants to quickly remove and repair all damage to get paid
• You want your property restored to pre-loss condition with due care and diligence

Working directly with your insurance company may seem good.

However, some contractors align their needs with your insurer’s needs: they work together to close the claim quickly and limit your chance of finding extra damages. Your insurer wins, the contractor gets paid, and you’re left with a lower payout.

Contractors Like to Maintain Good Relationships with Insurers

Many insurers like to work with contractors who save them money: contractors who get the job done quickly while meeting the basic requirements.

As a homeowner, you want contractors to spend as much time on your property as needed to get the job done right.

If a contractor repeatedly spends excess time on a project making things right, it increases costs for the insurer. The insurer may be less likely to work with the contractor in the future.

Restoration contracting is a for-profit business: contractors want to maintain good relationships with insurers to ensure a steady stream of business.

Contractors Don’t Know Your Insurance Policy or Coverage

Different homes have different coverages. Typically, contractors don’t review your policy or understand your coverage. Instead, their goal is to remove damaged items and repair the property to pre-loss condition.

Again, this may sound like a good thing – but it’s not always one.

If your policy excludes a certain type of damage – say, wind-driven rain – then the contractor could fix that damage before receiving clarification from the insurance company. When the insurance company denies that claim in the future, you could be forced to pay for these repairs out of pocket.

Acting Too Fast Can Reduce Your Payout

Overall, some contractors act too quickly, and acting too quickly can reduce your payout substantially.

Some of the reasons acting too fast can cost you include:

• You could miss hidden damage – say, smoke damage to your curtains, particulate matter in the HVAC system, or mold behind walls.
• You may not have time to document damage with photos or videos. If an insurer demands proof in the future, you might not have it.

Cleanup & Restoration: First Steps & Best Practices

The first steps after a disaster can be stressful.

Instead of immediately trusting your insurer’s preferred contractor, consider the following first steps and best practices:

1. Don’t remove, repair, or demolish components until thoroughly documenting them first.
2. Document visible damage to your property, taking as many photos and videos as possible.
3. Scan for hidden damages – like a smell of smoke in your HVAC system or signs of water damage on walls or ceilings.
4. Request a third-party estimate from a trusted contractor.
5. Don’t be pressured into accepting a quick settlement or payout from your insurer. Be patient. If you need time to think or get a second opinion, you have time. Respond to your insurer in a timely manner, but don’t be pressured into acting against your own best interests.
6. Check your policy yourself – especially if your insurer is using exclusions in your policy to justify a lower-than-expected payout (or deny your claim entirely). Sometimes, insurers use vague or ambiguous policy language in their favor and assume you won’t argue.

Final Word

The insurance company’s goal is simple: to minimize claim costs and close the claim as quickly as possible. Insurers often like working with contractors who align with these goals.

As a policyholder, you have the freedom to work with the contractor of your choice.

Your insurance company’s preferred vendors and contractors may be perfectly honest people. However, there’s often a conflict of interest, and that conflict of interest could lead to a lower payout than you deserve.

Overwhelmed with your insurance claim? Want to avoid being caught in the “preferred vendor” trap?

Schedule a Free Consultation

Contact ClaimsMate for expert insurance assistance. We’ll conduct a brief, no-cost evaluation of your claim and determine how a public adjuster could help.

Stephanie Corona

Stephanie is a property insurance claim expert with over 20 years of experience working as an insurance adjuster, expert witness, appraiser and umpire. She is passionate about sharing her expertise, knowledge, tips and training to help both property owners and Public Adjusters in their pursuit of effectively managing claims and recovering the claim settlement they deserve after a loss.