When you experience some damage to your property, you’ll need repairs handled by a contractor as soon as possible. If you’re insured, the process may not be as complicated, but you’ll still struggle to deal with one or more contractors during your insurance claim.
Usually, you can hire an independent contractor or settle for your insurance firm’s preferred vendor who works with the insurance company. But do you really know who your insurance company’s preferred vendor works for? When you hire them, will they handle the task to satisfaction?
If you’re wondering the same, Review Your Adjuster will provide you with detailed information about these contractors. Read on our adjuster reviews to determine whether you should settle for a preferred vendor or hire an independent contractor.
Who is a Preferred Insurance Vendor?
Preferred insurance vendors are contractors who have an established relationship with your insurance provider. When there’s damage to your property, they’re who your insurance provider recommends for remediation purposes.
Since they work hand-in-hand with your insurance company, preferred vendors will most likely consent to discounted prices. They might also agree to use specific materials and labor. In return, your insurance company gives them referrals, resulting in lower advertising and marketing costs. Therefore, preferred insurance vendors mostly work for your insurance company.
Who is an Independent Contractor?
On the other hand, an independent contractor is a licensed vendor that’s not recommended by your insurance provider to fix the damages in your home, as per your insurance claim. To work with an independent contractor, you’ll have to conduct in-depth research to find the best company for the job.
Although you hire them yourself, it doesn’t imply that they don’t work with other insurance providers as preferred vendors. Independent contractors set their quotes based on the damage to your property. Therefore, unlike preferred vendors, they may not consent to discounted prices.
So, you should expect to get charged more than when you choose a preferred insurance vendor. To get the best people for the job, you can check out adjuster reviews to discover what they say about specific contractors. Fortunately, independent contractors handle every task to perfection. They will hardly take shortcuts to reduce the cost of installations and repairs.
Preferred Vendor List
Have you ever heard of a preferred vendor list or program? Preferred vendor programs are meant to protect the financial interests of insurance companies. Typically, these programs are tailored for high-volume repair tasks, including fire, water, and smoke repairs. However, this list doesn’t cover biohazards.
Usually, insurance adjusters advise their clients to use these programs, but they don’t do this to benefit you. On the contrary, they recommend such a program because it will save your insurance company a significant amount of cash.
The contractor may end up using labor and materials issued at discounted prices. And sometimes, this may compromise your home’s safety. Although the preferred vendor may have the certification for certain remediation, it doesn’t necessarily imply that they’re qualified or experienced to handle specific tasks.
These are some of the considerations you make to rate your adjuster. If the adjuster recommends you use a preferred insurance vendor from their company’s list, ensure to be very critical. You must assess whether the recommended contractor’s services guarantee your home’s safety requirements even if it will save you some money.
Benefits of Using Preferred Vendors
When you decide to use preferred insurance vendors, you should expect to reap some benefits.
First, using a preferred vendor is ideal because you don’t have to struggle to find a licensed contractor yourself. The insurance company usually works with skilled contractors. So, they will hardly recommend a vendor if they’re not certain that the company has the experience, skills, and qualifications to complete a specific job.
Additionally, if the preferred vendor doesn’t handle the task to your satisfaction, you can file a complaint against the contractor through your insurance company. There’s a high likelihood that the contractor will address your complaint accordingly. That’s because they rely on the insurance company for referrals, and they wouldn’t want to risk losing future clients.
The Downsides to Using Preferred Vendors
Unfortunately, using preferred vendors doesn’t always work in your favor. The contractors recommended by your insurance company also have their downsides.
Notably, preferred insurance vendors rely on a discounted price list to handle repairs. Sometimes, the work required on your property may exceed the agreed-upon price. As a result, this pressure could cause the contractors to cut corners to match up to the low costs.
Moreover, the preferred vendors’ loyalty is more inclined to your insurance company than you. Therefore, they may not want to question anything that your insurance company recommends. Especially things that could compromise the contractor’s relationship with their insurance company. Their focus is on safeguarding this relationship because of future business deals.
Additionally, preferred insurance vendors work with a discounted price list. Therefore, they may need to handle more tasks within a limited amount of time to counter the income loss. Consequently, they might rush specific tasks and end up doing a shoddy job.
How are Preferred Insurance Vendors Selected?
Usually, insurance companies have to select preferred vendors to work with. The contractors usually handle repairs on behalf of the insurance company depending on your claim. However, not every contractor can become a preferred vendor. They have to agree to specific terms.
You must agree to work off a discounted price list or to set a limit on what you will do to remediate the scene in exchange for the significant amount of work. When you agree to these terms, you’ll become a favored vendor with one of the major insurance companies and receive referral business.
The business comes in with little to no effort, as opposed to having to establish a solid reputation and sell oneself as providing high-quality work and services. However, you must ensure that you can handle the specific task because you don’t want to get involved in legal cases for work poorly done.
Why Do Companies Become Preferred Vendors?
You might be wondering why a company decides to become a preferred insurance vendor even though it knows it’ll offer its services at discounted prices. Most times, a company will become affiliated with an insurance company because of the benefits they obtain.
Contractors that no longer want to invest as much money in marketing their company and services find becoming a preferred vendor intriguing. They are now able to earn more money by compromising their quality because they trade off some of their profit margin for a bigger volume of labor.
As a result, this is a cause of concern to property owners. It might even become an ethical issue. You might wonder whether the contractor works for you and if they’re qualified to handle the tasks at hand, or whether they simply work for the insurance company.
Although the contractor work on your property, they’re more likely to bend to the will of the insurance company. That said, a company will choose to become a preferred vendor because of the amount of work they get from your insurance company.
Who Do Preferred Vendors Work For?
Preferred vendors are independent contractors who work for the insurance companies, not the policyholder. Insurance companies engage with these organizations or third-party companies to provide the service while lowering their costs because they are heavily regulated and are not permitted to offer property damage contracting services directly themselves.
These businesses, in turn, consent to limit the repairs to a minimum level and to deliver services to the insurance companies at significantly reduced rates, not necessarily what is necessary to restore your safety.
What Happens When You Decide Not to Use Preferred Vendors?
Your insurance company usually works with preferred vendors. Consequently, the adjuster will always try to convince you to work with their preferred contractor. But sometimes, you just want to use an independent contractor. So, what happens when you decide not to use your insurance company’s preferred contractor?
Well, your adjuster will try to use all means to convince you to settle for their service. The adjuster might even scare you into believing that they’ll not pay your claim if you use an independent contractor. So, if you get scared to hear that you’ll cater the repair costs, you might be forced to choose their preferred contractor.
However, these are usually mere threats. If your property is insured, regulations state that your insurance provider must let you select your preferred company to handle repairs based on your claim. Similarly, your insurer is obligated to pay a reasonable rate as per your claim.
Moreover, your insurance company cannot increase your policy rates based on the company you choose to handle the repairs. Additionally, your provider cannot deny your claim because you’ve refused to work with their preferred vendor.
Fortunately, policy rates are regulated, although they differ from state to state. You can conduct adjuster reviews to determine what’s allowed by your state’s insurance commission. So, it’s up to you to decide whether to work with your insurance company’s preferred vendor or an independent contractor.
Conclusion
Property damage can occur because of several factors, including fires, floods, and other natural calamities. Fortunately, if your home is insured, you don’t have to worry much about handling repairs. You’ll only need to file your claim.
However, insurance companies often have preferred vendors who work on your repairs at a discounted price list. Alternatively, you can select an independent contractor to handle the repairs. But the adjuster will try to convince you to choose their preferred vendor. Generally, a preferred vendor works for the insurance company instead of you because they want future business referrals.