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They don't tell you their "preferred providers" may be cutting costs

insurance company preferred providers

When your home is damaged by flood, fire, or other catastrophes, your insurance company may refer you to one of its “preferred providers” for remediation work. These providers usually are contractors who work under an ongoing arrangement with the insurer. The insurer may promise to guarantee the preferred provider’s work as an incentive for you to use them.

So be aware that these contractors have a business relationship with your company. Because of that, they may put the insurer’s interest ahead of yours. They also may feel pressure to hold down costs and do less work than what is truly necessary in order to keep the insurance company’s costs low.

As an alternative, you have the right to take the claim money your insurance adjuster sets aside for your repairs and hire your own contractor. If you do this, you will have more control over the process and can be more certain that the contractor is doing the job that needs to be done, not simply holding down costs for your insurance company. The downside is that you will lose any added guarantee of workmanship that your carrier gives for work done by its preferred providers.

Whoever does your repairs, be sure to hire a licensed contractor and check their credentials through your state’s contractor-licensing agency.    

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