Why Do Insurance Companies Refer Certain Restoration Companies?
Read This Before Calling Your Insurance to File a Claim - What to Know Before You File an Insurance Claim--As many people think the insurance company is referring a company because they are top of the industry and they know they'll get the job done the right way. However, this isn't the case. In fact, these companies they are referring are being referred for one reason: To save the insurance company money.
What is a preferred vendor?
A preferred vendor is a restoration company that, when you call and file a claim, they will say: "call this company." or "We are not able to guarantee we can pay everything owed unless you use this company" Which is not the case: You have the right to hire any restoration you want. And if the insurance covers the claim, they will pay off any invoice (within reason).
What is a third party administrator? (TPA)
A third party administrator is a fancy term for a company that is hired by the insurance company in order to create these 'preferred vendors'. The preferred vendor has to put in an application. The first part of the application is a contract you must sign stating what you can and cannot do on a claim referred to you by the insurance company. We thought about signing up, then after reading that contract we decided not to. We'd rather work for the customer and not for the insurance company. That being said, we still work with the insurance company and bill them directly, though we advocate on your side, as we don't have to abide by this contract made to save the insurance company money on your behalf.
What is a public adjuster and how do I know if I need one:?
A public adjuster is a licensed adjuster who does not work on behalf of the insurance company. They are able to read your insurance policy and debate coverage with your adjuster. So, if you believe something should be covered under your policy and your adjuster is saying its not, you may want to contact a public adjuster.
What are 'industry standard pricing'
'industry standard pricing' comes from the program most insurance companies use: Xactimate. This is a program made by Xactware, and it is a great program, we use it personally. Xactimate provides a median price list each month for every different area you may be located in. They come up with these numbers by getting the prices of x ammount from companies add them all together then find the average. Xactware is such a great software that it has a price list editor, then you can enter how much you pay your employees, taxes, workcomp, etc, and update the price list. This is how we invoice the insurance company is through the program Xactimate.
In the unfortunate event that your home has been damaged by water, smoke, mold, fire,
or any other catastrophe, your first reaction is to call your insurance company to file a claim. There's a few things you should be educated about before calling your insurance company to file a claim. One of the most important things is when you call your insurance company to file a claim they are going to refer you to whats called 'their preferred vendor'. Now there are a lot of reputable water restoration companies that are preferred vendors. But its important to know what makes them a preferred vendor. The insurance companys 'preferred vendors' that they refer you to come from TPA's this is a third party administrator. For a water restoration company to become a preferred vendor, they must sign a contract with this TPA, and are under contract with what they are allowed to do to repair your home. So while the preferred vendor is under contract with this TPA, they end up working for the insurance company, and not for the client (you). The contract they sign with these third party administrators limits them to what they can do during the restoration process. So for instance if you have encountered water damage to your home and all the carpet in your home is wet, the preferred vendor may only be able to extract the water, dry the carpet, then clean the carpet. While a company who is not under contract with a third party administrator, can typically remove the wet carpet and replace it with new carpet. Along with many other things:
Proper cleaning
Proper content manipulation
Replacement of wet damaged kitchen cabinets
Replacement of wet damaged hardwood floor
Adequate hours allocated for equipment setup and monitoring
So, while there are good companies that are on TPA preferred vendor lists, many of them are forced to cut corners in order to make a profit. Leaving their clients the bare minimum to try to get them back to pre-loss condition, while following the contract they have signed that outlines exactly what they are allowed to do.
So How Do I Find a Restoration Company?
Your insurance company may make it sound like you have to go with their preferred vendor, but you have the right to hire any restoration company you choose.
Hiring a company that is not a preferred vendor can be risky too. How do you know they are reputable? How do you know they have the correct training? For this we would recommend reviewing
Checking on the IICRC Certified Firm Locater to make sure they have the proper credentials
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