Many of the major insurance carriers don’t promote the fact that their “insureds”, aka policyholders, have the right to choose ANY emergency cleanup / restoration contractor they wish. They will offer a contractor one or two or three from their “preferred vendor” list which I suppose creates the appearance of having a choice. The hard fact is, you can choose any contractor, vendor or supplier to work with, whether on their preferred list or not. Now that sounds like a real Right to Choose doesn’t it?
“Claims steering” is an illegal practice
The claims adjusters from these same carriers will actually hint or strongly suggest to their clients that they should only work with a preferred vendor, this is called “claims steering” and that practice is illegal. Most every restoration contractor who has had jobs stolen from them by these unscrupulous adjusters can share these same stories. Unsuspecting insureds are told falsehoods like “If you work with that contractor, we might not be able to reimburse you for all the costs” or “That contractor you signed with is not on our vendor list”. Both statements, though not actual claims steering are still highly manipulative at best and done to sow seeds of doubt in you contractor selection. Claims steering…”so what”, you might say, or “I’d rather work with one of their contractors, so I don’t have any issues”. Here are a few things to consider before you decide if this is a big deal or not.
The main difference between a preferred vendor & an independent contractor
The main difference between a preferred vendor & an independent contractor is on who’s side the contractor will advocate for, you or the carrier. If the contractor is brought in by the carrier as a preferred vendor, that contractor needs to be a bit more compliant to maintain a happy relationship to keep future job leads keep coming in. That vendor is beholden to his preferred vendor relationship & the rules that govern that relationship… and you can bet there are rules, and the rules favor you know who. The independent contractor is not encumbered by this relationship and can advocate for the client with no fear of losing any future job leads.
Do you really feel comfortable working with a preferred vendor?
If you talk to any one of these preferred vendor contractors, they will tell you story after story about getting screwed by the carriers under this relationship. They will say, “they cut my invoice & won’t pay for this and we’re not allowed to charge for that”. In short, the contractor either must do certain work for free or maybe be tempted to cut corners to make up for the expected billing shortfall. So why would any contractor be a preferred vendor you may ask? Many of the major national franchises have an obligation to work with these carriers for one. Secondly, volume of work can make the billing shortfalls a bit more palatable for these preferred vendors. Let’s spin it around, do you really feel comfortable working with a preferred vendor?
At True Restorations, we pride ourselves on client advocacy
Our company operates as an independent contractor, we pride ourselves on client advocacy. We have very few issues performing emergency work, getting approvals & getting paid the correct amount from the carrier. We explain the whole claims process to our clients, obtain a signed “Right to Choose”, a “Service Authorization” and a signed “Direction of Payment” documents before any work is even started. The main reason we can operate independently and be assured that everything will work out is due to the written & agreed “industry standards” developed by other independent groups (IICRC) working in concert with the carriers. The agreed values of services, including actual work (labor), materials, equipment usage, etc. are delineated line items contained within an estimating software called Xactimate. The delineated written standards coupled with the corresponding estimating line items make the contractor playing field level for all. Whether you’re a preferred or independent vendor or a claims adjuster, all use the same database to come up with an agreed acceptable scope of work and value for the same using this system.
Hopefully this helps better explain what your right to choose means and why you don’t need approval from anyone to make your own decision on who will work on your insurance claim. When an emergency cleanup condition arises for you, a neighbor, a friend or loved one, please pass along this valuable information as a resource when making decisions & commitments on whom to hire. For more valuable information on water, smoke, fire & mold emergency cleanups, please visit our blog on our website at https://truerestorations.com/blog/
The True Restorations Team