Why You May Want to Think Twice About Signing a Contract With Your Insurance Company’s Preferred Service Provider
When your house is hit by a leak or flood, you may feel too overwhelmed by the mess to search for and compare cleaning and restoration companies. Why hunt for someone when you can go directly to a Preferred Service Provider (PSP) recommended by your insurer? It seems like the obvious choice—your water damage insurance claim will be paid faster, and if your insurance company prefers them, they must do great work.
It isn’t until the job is completed and you notice only the bare minimum has been done that you realize neither company had your best interests at heart.
The truth is, in most cases, “Preferred Service Provider” is simply a cost-cutting measure for insurance companies wrapped up in a clever marketing name. The arrangement is ideal for both parties—insurers can get quality work at a lower cost, and contractors are rewarded with a steady stream of work. But when there’s a quid pro quo, it’s the client of both that can pay the price.
The problem with the Preferred Service Provider model
The moment a contractor jumps onto a PSP list, their main source of referrals comes from the insurance companies they partner with. To keep the quantity of work streaming in, contractors will do what they can to keep insurers happy, and that can be detrimental to homeowners for a number of reasons:
- The contractor goes by the insurer’s scope of work, not yours. Insurance companies want to spend the least amount possible on your payout, and therefore, will want to dictate the scope of the project, even if it doesn’t include all the repair work you need. If a contractor’s loyalty lies with the insurer, there’s a good chance they’ll do “just enough” to get your home back in shape without addressing additional concerns.
- The guarantee you’re provided may leave something out. All insurers guarantee the work performed by their PSPs and will arrange for repairs if the restoration doesn’t meet the requirements established in the contract. But as previously mentioned, contractors may not include suggested repairs in the initial estimate for the insurer, even if they’re covered by their policy, forcing homeowners to pick up the tab for secondary, yet essential, repairs.
- Insurers aren’t transparent about your choices. If a homeowner is wondering how to avoid getting their water damage claim denied, they often believe they have to go with a PSP. In reality, you have the right to choose any restoration company you want without retaliation from your insurer. While an insurance company will suggest a contractor, it should be that—a suggestion. In the end, the decision lies with you.
The benefits of using a PSP are that you can be sure you’re partnering with a vetted contractor, that their work is guaranteed, and that you won’t be overcharged for work. On the flip side, it’s likely the true extent of your damage won’t be addressed, or your contractor may put in the least effort possible to remediate the problem to appease the insurer, costing you more down the road.
Water damage insurance claim tips to remember
Your home is your biggest investment, and any repairs to it require you to do your homework. While your insurance company’s PSP may be your best option, it doesn’t hurt to first ask your friends for recommendations on additional cleaning and restoration companies, check out different contractors’ online reviews, and get two to three different estimates. When your insurer does push their partners toward your project, you have the information in place to determine if it’s better to go your own way.
To schedule an in-home estimate or to learn how to get insurance to pay for water damage, contact Pride Cleaning & Restoration in St. Louis today at 314-668-1223.
Leave a ReplyWant to join the discussion?
Feel free to contribute!