Understanding Your Rights After A Loss

September 24, 2019 | Insurance

Understanding Your Rights After A Loss


After a water or fire loss in your home, things can be a little…confusing.  What do you do with your stuff?  What can be saved?  How can we fix it?  Luckily, there are many professionals right here serving the Muncie, Anderson, and New Castle areas that can help you figure all of these things out.  So, you hop on Google, and start looking for “water damage services near me”.  A list of contractors come up, and you pick one based on their reviews, call them up, and they head your way to help you through the damage.  While you’re waiting, you call your insurance company and tell them you’ve got a contractor on the way.  Your insurance representative says “Don’t worry, I’m sending another restoration company your way.  You inform them you’ve already got someone coming, and they tell you to call and cancel, their preferred company will do the job.  But you already like the company, they’ve got good reviews, and your brother-in-law works there!  So what can you do?

The Power Is In Your Hands

First off, the law, and your policy, are clear.  You have the right to choose whatever contractor you like to work on your home or business.  No matter what your agent or adjuster tells you, you have the power to determine who is doing the work.  You’re signing the contract, not the insurance company, so you get to choose.  Always keep in mind, the insurance company, and any contractors, work for you and not the other way around.  Your insurance company has the responsibility to determine coverage. And your contractor has the responsibility to perform the necessary work in an efficient and ethical manner.

Don’t Steer Me Wrong

Oftentimes, insurance adjusters will tell you that if you don’t use their contractor, your claim will be denied.  This is a practice known as “steering“, and it is illegal in most states.  That has not stopped adjusters from practicing it, as most homeowners are unaware that it’s an illegal practice.  But this is different from another everyday, illegal practice that we commonly see.

Tort Reform

So let’s say you’ve had your chosen restoration company out, and you signed a contract.  Your insurance adjuster might give you the same line. They’ll tell you that if you don’t use their contractor, your claim will be denied. Or maybe they say they won’t pay all of the claim.  This is called “tortious interference“.  Meaning, you already have a signed contract with another company, and your insurance company is using your claim as leverage to convince you to break your contract.  Wikipedia defines tortious interference as “when one person intentionally damages someone else’s contractual or business relationships with a third party causing economic harm.”  This is an illegal, and litigable act, but is still very common in the insurance repair industry.  So why do they play these games?  What’s the point?

What’s In It For Them?

I’ve got another article coming soon that will dive deeper into the insurance company’s secret weapon: The Preferred Vendor Program.  We’ll discuss what it is, why it’s bad for out industry, and most importantly, why it’s bad for our customers.  But for now, I’ll sum it up by saying it’s all about the money they save by using these contractors as opposed to independent companies.  Through cost-cutting measures and substandard work, they’re saving a bundle on your claims, and you are stuck with the less than exemplary results.

Remember Your Rights

  • You have the right to choose which contractor you would like to restore your home.
  • It is illegal for your insurance company to require you to use their preferred vendor. Furthermore, it is illegal for them to even suggest one of their preferred vendors to you unless you are specifically asking for one.
  • All contractors that work on your loss “should” work for you and not the insurance company.
  • Using a preferred vendor does not guarantee higher quality work or that your loss will be done in a timely fashion.
  • Insurance companies are not allowed to dictate what repairs are done or how they are performed. They are only required to confirm that the repairs are done in a professional manner and at reasonable prices.
  • Your insurance company works for you. Remember, you pay them as insurance to perform for you when an emergency happens.

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