A preferred vendor or contractor is a company that has signed an agreement with an insurance provider or third-party administrator to provide water mitigation or repair services for homeowner’s they insure. The agreements require the contractors to have proper insurance, trained staff and technicians and follow certain criteria designated by the insurance provider or third-party administrator.
The Pros
Most of these items are good for the homeowner because it requires the contractor to be legitimate enough to have the proper insurance, training, and expertise to mitigate your damage and settle your claim. The problem lies in the “extra criteria” the insurance provider or third-party administrator puts on the contractor.
The Cons
These “criteria” can handcuff a contractor working in your home because of the limitations set by the program.
The insurance company could limit decisions made by the contractors, types of equipment or methods used by the contractor, the programs may increase “red tape” during the water mitigation or repair process, making the contractor focus more on paperwork than providing quality service, or the contractor will agree to lower rates for their services to participate in the preferred program.
Due to these restrictions, some preferred contractors will cut corners or provide inferior service to the homeowner out of necessity. They also may side more with the insurance company in a dispute on the scope damage.
Conclusion
Some insurance company’s “highly recommend” their preferred vendors while other insurance company’s do not run a preferred vendor program. In the end, the homeowner has the power to hire any contractor they wish. Our recommendation to any homeowner is to research the reputation of the restoration contractor online before they hire them. Just because the contractor is recommended by the insurance company doesn’t mean they are the best option. It is always good for a homeowner to be properly informed before they hire a water mitigation contractor.
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