How to Decide Whether to go with Your Insurer’s Preferred Contractor

As a policyholder, is it better to hire a contractor recommended by your insurance company or vet contractors on your own? Find out here.

filing insurance claims

Tamarcus Brown on Unsplash

June 1, 2019 marked the start of Florida’s Hurricane season. It is also the time of year when Florida experiences an increase in other weather-related natural disasters like heavy rains, blustery winds, tornadoes and lightning strikes. As a result, the demand for filing insurance claims for home and property repairs, rises. If you are a residential or commercial policyholder and your home or property has been damaged by a storm or other event, you may be wondering whether it’s better to hire a contractor recommended by your insurance company or vet contractors not on your insurance company’s preferred vendor list.

As you might imagine, there are pros and cons for either choice. In this blog, I will be addressing both the benefits and drawbacks, to help you, the residential or commercial policyholder, make an informed decision.

Florida Hurricane Season

Photo by Jens Behrmann on Unsplash

What Does ‘Preferred Contractor List’ Mean for Homeowners and Property Owners?
The insurance business is highly regulated and as such, insurance companies are not, by law, allowed to offer contract services themselves. As a result, they will often partner with third party contractors. Doing so allows insurers to offer their customers some perks, such as discounts or warranties, should they choose a contractor from the insurance company’s preferred list.

On the positive, using your insurance company’s preferred vendor can be a helpful way to receive fast service. Additional Benefits of Using a Preferred Contractor:

  1. It could potentially speed up the claims process.
  2. It may minimize price fluctuations.
  3. In many cases (but not all), the work by the contractor is guaranteed.
  4. Policyholders could receive discounts such as a reduced premium.

On the other hand, there are potential drawbacks that you, the consumer, should be aware of if you choose to use a company on your insurer’s preferred contractor list.

  1. In many cases, vendors on an insurance company’s preferred list agree to provide services for the insurance companies at a price that is greatly discounted.
  2. Being on the preferred list and offering the insurance company a deep discount does not guarantee the vendor will be able to properly restore the property with the remaining funds.
  3. Therefore, the contractor may limit repairs, when necessary, to a minimum.
  4. Preferred vendor lists can be a way for the insurer to control costs and restrict the policyholder from hiring their own vendor, since they have contracted reduced rates with these vendors.
Water Damage Roof Damage

Photo Source – Milly Eaton from Pexels-

Cautionary Case
A client of the Desir Law Firm used a contractor selected by his insurance company to do repairs after his home had significant roof and interior water damage. While the contractor replaced/repaired the shingle portion of the roof, they refused to repair the flat roof. The contractor stated they would only repair what was approved by the insurance company and nothing more.

In a situation like this, you may wonder what, if any, recourse did the client have in this situation? Where does the burden of responsibility fall, on the insurer who provide their customer with the Preferred Contractor list and who knew the shingle and flat roofs needed to be repaired?

As a property owner, whether you prefer to vet your own contractors or interview contractors on your insurance company’s preferred contractor list, it is highly recommended you make sure they are,

  • Bonded
  • Have general liability coverage.
  • Provide you with warranties or guarantees in writing.
  • Show you a certificate of insurance, prior to any work being started.
  • Read or consult with an attorney prior to signing any contract for work or assignment of benefits.

Insurance claims can become complex and time consuming, which is where an attorney who works for you, can provide time savings and expertise to negotiate a fair settlement.

We’ve helped property owners just like you get the money you need to rebuild, replace or repair what’s been damaged by an event or natural disaster. Contact us to discuss your unique situation.

The information provided here is intended for informational purposes and should not be considered legal advice.

About Desir Law Firm
Attorney Leonard Desir is the founder of Desir Law Firm, a boutique insurance law office representing only insurance policyholders. We work with homeowners, renters, homeowner associations (HOAs), condominium associations, small and mid-sized businesses, and commercial property investors throughout the State of Florida.

When damage happens to your home or business, you have enough to worry about without having to worry about whether your insurance company will act in your best interests. Learn how Desir Law Firm can help you with your insurance damage claim. Contact us for a free, no-obligation consultation.

Florida law allows for the recovery of attorney’s fees and costs from your insurance company, if you prevail in a lawsuit. At Desir Law Firm, even if we do not prevail, you will not owe money to an attorney since our cases are taken on a contingency basis. It is truly a win-win situation to hire an insurance attorney to dispute a partial or complete insurance denial or partial payments.

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