Independent vs. Preferred Contractors

When it comes to insurance claims, there are two main types of vendors that policyholders can work with: independent vendors and preferred vendors. Each type of vendor has its own benefits and drawbacks, and it’s important to understand the differences between them when making a decision about who to work with for an insurance claim.

Independent vendors (Like Bio Pro) are typically third-party contractors who are not affiliated with any particular insurance company. These vendors are hired by policyholders, not insurers, to perform repairs or remediation work after an insured event, such as a fire, flood, or mold growth. Independent vendors are not beholden to any specific insurance company, which means that they are free to provide objective advice and recommendations to policyholders.

Preferred vendors, on the other hand, are contractors who have a pre-existing relationship with an insurance company. These vendors have been approved by the insurance company and are often included in the policyholder’s insurance policy as a recommended service provider. In some cases, policyholders may be required to work with a preferred vendor in order to receive coverage for a claim.

One of the main benefits of working with an independent vendor is the ability to choose a contractor who has specific expertise in the type of work that needs to be performed. For example, if a policyholder needs mold remediation, they may choose to work with an independent vendor who specializes in mold removal rather than a preferred vendor who provides a wide range of services. In addition, independent vendors may be able to offer more competitive pricing, since they do not have to pay fees or commissions to an insurance company.

One of the main benefits of working with a preferred vendor is convenience. Since these vendors have already been approved by the insurance company, policyholders can often skip the process of obtaining multiple quotes and negotiating prices. In addition, preferred vendors are often required to adhere to certain service level agreements, such as responding to calls within a certain timeframe or completing work within a set number of days.

However, working with a preferred vendor can also have drawbacks. Since these vendors are affiliated with an insurance company, there may be a perceived conflict of interest. Some policyholders may worry that a preferred vendor may prioritize the interests of the insurance company over their own interests. In addition, policyholders may feel that their options are limited when working with a preferred vendor, since they may not have the same level of flexibility to choose their own contractor.

Is there a conflict of interest using preferred vendors? Since these vendors operate on the inside of the insurance companies trust and in exchange, control the amount of the loss otherwise known as the loss severity. Their job to find all of the required work to make the insured hole and represent it fairly to the carrier. 

Now there is nothing wrong with the insurance industry using preferred vendors who are experienced and qualified at fire, water, restoration, etc. However, they should NOT be relied on to run the claim and attempt to settle the matter for an insurance company. It should be looked on as a tool to help the insurer and the insured understand the scope and potential cost of a loss and render mitigation services. 

Of course these issues can be subjective and subject to negotiations and discussions for final settlement. The policyholder needs to have a clear understanding of the adjusting process, their coverage and procedures before any work begins – especially work by a preferred insurance company restoration contractor. Any benefit of the doubt on scope or price should be resolved in the policyholder’s favor.

Ultimately, the decision to work with an independent or preferred vendor will depend on a number of factors, including the specific needs of the policyholder, the type of work that needs to be performed, and the preferences of the policyholder. It’s important to carefully consider all options and to choose a vendor who is experienced, trustworthy, and able to provide quality work at a fair price especially when it comes to you and your home. By doing so, policyholders can ensure that they receive the best possible outcome from their insurance claim.