You Have the Right To Choose Any Contractor You Want to Complete your Repairs. You Do Not Have to Use a Contractor Referred by Your Insurance Carrier or Their Third Party Administrator (TPA)
When you inform your insurance provider of your property damage, they will likely direct you to a TPA to handle your claim or encourage you to choose a contractor from a ‘preferred vendor list’. You are under NO obligation to hire a contractor recommended by your insurance company or their TPA. In fact, be wary of these companies.
Despite what you may be told, contractors with ‘preferred’ status have obtained this designation by tacitly agreeing to save the insurance company money in return for obtaining continuous work and income. Contractors referred by insurance companies or their TP As often save money by agreeing to an inappropriately narrow scope of work (repairing/replacing fewer items than you are entitled to) and by cutting corners when it comes to quality, craftsmanship, and/or safety. Pressuring you to choose a particular contractor or select from a ‘preferred vendor list’ is at the very least unethical.
According to the Michigan Department of Insurance and Financial Services (2017)1, “Your insurance company may have a preferred contractor or repair facility list. [However], you are not obligated to use their suggestion, and have the right to choose whomever you feel comfortable using.” Despite what you may be told by your insurance carrier, you are not responsible for paying the difference between your contractor’s estimate of repairs and the estimate prepared by a contractor affiliated with the insurance company or their TPA.
At EJH, we believe it is in your best interest to hire a well-qualified contractor with years of industry experience, proper licensing, and IICRC certification.
Your Property Should Be Restored to Its Pre-loss Condition
Your insurance company is responsible for paying to have your property restored to its pre-loss condition using materials of like-kind and quality. This means that when your property is restored, you are entitled to have the same quality construction materials that you had prior to your loss. For example, if your property had marble countertops before the loss, your insurance company should compensate you for marble countertops, not a lower grade material such as laminate.
Similarly, if you did not have two different colors of siding on your house before the loss, or two different flooring types in the same room, you do not have to settle for that after the loss. Your insurance carrier is responsible for restoring your property to its pre-loss condition.
You Do NOT Have To Agree to the Settlement Amount Proposed by Your Insurance Company
Because insurance companies are for-profit businesses, they will naturally try to limit what is paid out on a property loss. Following a disaster, your adjuster may try to convince you to accept less money than your claim is actually worth. This is generally done by providing you with an incomplete scope of repairs (i.e., agreeing to repair fewer items that you are actually entitled to) and leading you to believe that you must accept a specified settlement amount or pay the difference out of pocket. If you have reason to believe that your claim is worth more than the settlement amount proposed by your insurance adjuster, you have the right to challenge this by contacting a reputable contractor and requesting a complete scope of repairs. This scope can then be used to negotiate an appropriate settlement.
Should there continue to be disagreement regarding the settlement amount, it is your right to demand appraisal. At this point, you can choose to have your contractor of choice represent you at appraisal or hire a public adjuster. Regarding the latter, although reputable contractors will often go to appraisal with you free of charge, “public adjusters will seek part of your settlement as payment for their services” (Michigan Department of Insurance and Financial Services, 2017)2.
Whatever the case may be, it is important to recognize that you are under no obligation to agree to the initial settlement amount proposed by your insurance company. In fact, in more cases than not, when you work with a reputable and experienced restoration contractor, your final settlement amount is the result of a series of back-and-forth negotiations between your adjuster and the contractor regarding exactly what needs to be repaired in order to restore your property back to its pre-loss condition.
You Have the Right to Request a Current and Complete Copy of Your Insurance Policy
Following a property damage, it is important that you understand what is covered under your insurance policy so you are prepared to make informed decisions. When a disaster strikes, however, you may not have access to, or remember where, your insurance policy is located. Upon request, your insurance carrier is obligated to provide you with a copy of your current and complete insurance policy.
Providing True Relief to Property Owners
With over 40 years of experience in the insurance restoration industry, EJH Construction provides quality repair and restoration services to property owners.
As a team, we have decided to avoid affiliation with Preferred Provider lists and Third Party Administrated Programs, as we consider these to be inconsistent with the goals and values of our organization. Instead, we prefer to continue, tirelessly, advocating for the property owner, working amicably with insurance companies, and restoring damaged and destroyed properties to their pre-loss condition, efficiently and thoroughly.