An Insurance Company’s “Preferred Vendor” Is Not In The Policyholder’s Best Interest
When you file a claim with your insurance company, they will ask if you would like to use one of their “preferred vendors” and, in many cases, the insurance company will scare you into why you should use the business they suggest regardless of how qualified they truly are. However, the preferred vendor is in the best interest of the insurance company, not the insured. Here in California, you have the legal right to hire any licensed vendor to clean and decontaminate your home or business of biohazards. Let’s take a look into why it’s best for you to choose your own company to clean and decontaminate your property of the biohazards.
What is a preferred vendor list?
Preferred vendor programs are designed to protect the insurance companies’ financial interests. The programs are designed for high volume repair work such as water, fire and smoke repairs, not biohazards. Adjusters will “encourage” you to use this program as it typically saves the insurance company thousands of dollars at the expense of the clients’ safety due to the preferred vendors lack of experience in biohazard remediation and decontamination knowledge. You may be told that the preferred vendor is“certified” for biohazard remediation when in fact there are no insurance company “certifications” issued, so one must ask, “Can a property be cleaned and decontaminated properly by a company that primarily does mold, smoke and water remediation but are “certified” to do the biohazard work?” Certification does not always mean experience and know-how with respect to biohazard cleanup nor is there a certification for biohazard remediation.
If you are asked by the adjuster assigned to your claim if you would like to use a contractor from their preferred vendor program, you should ask yourself if your health and safety is worth your insurance company saving money on your behalf. We will work with your adjuster to be sure that invoice is fair, reasonable and based on market rates.
Most preferred vendors do very little Biohazard Cleanup
Most preferred vendors are restoration companies specializing in mold, water, fire,and smoke remediation and do very little biohazard cleanup work. In fact, unbeknownst to the insurance company, many outsource to a biohazard company because they don’t have the competency or license to properly clean up biohazards. The insurance companies “go to companies” are actually restoration companies that derive less than 5% of their revenue and jobs from biohazard cleanup which means the technicians being dispatched to your property have little to no experience in this specialized, meticulous and detailed trade which is critical to ensure that your property is cleaned and decontaminated to ensure that you, your family and future occupants are safe while also mitigating any legal risks.
Would you hire a plumber to do an electrician’s Job?
Property restoration business owners are made or broken by what is referred to as a “preferred vendor list” which are created by large property insurance companies. By becoming a “preferred vendor,” national franchise restoration businesses and the like are better able to market their worth to their franchisees, who are not typically trained as biohazard technicians. Bottom line is that these companies obtain a large quantity of restoration work (smoke, water, fire,mold) for the vendor, but at great cost to the policyholder.
Property restoration is a huge market and many companies are small businesses and these companies can be very successful or go broke based on these “preferred vendor programs”. Most national insurance companies prefer to use national restoration companies that are often times franchises with very little experience in restoration and almost zero experience in biohazard remediation. Almost all national companies with preferred vendor status work on volume and do as little required to finish the job for payment.Always make sure you protect yourself when choosing a company to handle such a specialized process such as Biohazard Remediation.
What happens when I call my insurance company?
When a homeowner/policyholder discovers a biohazard emergency and calls their insurance company or agent to file a claim, they often don’t know what to do in their time of distress. On the call, the policyholder would typically be referred to a “preferred vendor” to do the emergency biohazard cleanup and any odor remediation as a result of the incident. The term itself, preferred vendor,is intended to make the property owner trust and use the chosen vendor for the biohazard cleanup and restoration work. It is also left unclear that the homeowner can legally hire whomever they would like to perform the work in their home. In addition,the company never tells the policyholder that an insurance company cannot raise rates or deny a claim because the homeowner chose another company to do the work.
How are preferred vendors chosen?
To become a preferred vendor with one of the large insurance companies and gain referred business, you must agree to work off a discounted price list or agree to set a limit in what you will do to remediate the scene in return for the large volume of work. Instead of having to build a strong reputation and market yourself for quality work and service, the business flows in with little to no effort. However, if you’re not properly trained, improper biohazard cleanup can be life threatening to those who use or inhabit the property and expose you to legal risks in the future.
Why would a company want to be a preferred vendor?
Becoming a preferred vendor is appealing to restoration business owners who no longer want to spend as much money marketing their business and services. By sacrificing some of their profit margin for a higher quantity of work, they are now able to make more money by lowering their quality. This is where the questions of ethics arise: if any restoration business owner is receiving most, if not all, of their leads from preferred vendor list calls and less than 5% of their business is biohazards remediation,do they really work for the homeowner and have the qualifications for this specialize clean up or are they merely doing the minimum amount of work for the insurance company? Such a cleanup company is likely to bend to the whim of the insurance company, take the case even if they are not experienced in the needed skill set, all to avoid biting the hand that feeds them. In fact, many times restoration companies will subcontract with Biohazard specialists so they can keep the job but not have to do it because the are not properly trained or have the technicians will to do it.
What if more work is needed beyond the agreed upon limit?
If a restoration business owner has guaranteed not to charge the insurance company for the full amount of what is needed to remediate and decontaminate the biohazards from the structure, what do they do when they reach the agreed upon limit and the structure is either not fully decontaminated or is beyond their competency? Do they continue to work,essentially for free, or do they leave the property with contaminates and move on to the next job? At this point, are they really helping the policyholder cut future costs or are they creating more?
In addition to the financial limits the insurance company sets, there is also an inherent conflict of interests. A biohazard cleanup company is focused on cleaning and decontaminating the structure and are not paid to repair the structure and, thus, they tend to do the job through cleaning and decontamination versus actions such as removing walls because the biohazard cleanup company is not paid to replace them. Why have your walls taken out when they can simply be cleaned and painted?
What makes Bio SoCal unique?
Unlike other companies, Bio SoCal is a “direct to consumer” insurance damage claim service provider. We work for you and your best interest, not the insurance company and are able to be your advocate because we don’t have a conflict of interest nor are, we worried about doing something to jeopardize a preferred vendor status. Customers choose us because we are a local family-owned business with high integrity and are not a national franchise with limited experience and training. We’re credible, trustworthy, empathetic, and, most of all, ethical.
We want to work for you, not the insurance company
At Bio SoCal, we have made a conscious decision to not participate in national preferred vendor programs or third-party administrated contractor programs because we feel it is a conflict of interest. Most preferred vendors derive most, if not all, of their business from the insurance companies but we choose to focus on building our reputation through quality service and customer care.Instead of paying an insurance company to gain business, we like working directly for our clients and advocate on their behalf with the insurance companies. The reward for our services comes from the fair profit margins made by doing the work correctly while following industry standards and both state and federal laws in everything we do.
So who do the other companies work for?
Restoration companies who become preferred vendors work for the insurance companies, not the consumer. Since insurance companies are highly regulated and are not allowed to provide property damage contracting services directly themselves,they partner with these large franchise-based corporations and/or third party administrative companies to provide the service and cut their costs at the same time. These cleanup companies, in turn, agree to provide services to the insurance companies at greatly discounted prices and agree to limit the repairs to a minimum amount, not necessarily what should or needs to be done to regain your emotional and physical safety.
What’s so bad about insurance companies’ use of preferred service providers?
Insurance companies uses care tactics to persuade you to use the preferred vendor because it’s good for them, not for you. When policyholders suffer a property loss and their insurance adjuster confirms coverage for some or all the loss, many policyholders will hear the following from their adjuster:
“We [the insurer] have a preferred service providers list of recommended contractors you can choose from, all of which have been vetted for quality,reliability, and fair pricing (or discount pricing we preset). You can also choose your own contractor to perform the repair work, however, if you choose a contractor from our preferred service providers list, we [the insurer] will guarantee the work and arrange repairs if it’s not completed properly and furthermore we will pay whatever they charge based on our prearranged and negotiated rates.”
This sounds good on the surface but in many cases the work will not be done properly as the preferred vendors are restoration companies who do very little biohazard cleanup work and they simply do not have the needed skills. It’s far better to have the work done right the first time, especially when it comes to the danger and risks of biohazards that likely will still exist.
In addition to the low quality of the work, by hiring a preferred vendor, you also can’t be sure if the scope of the work is truly what is needed or if the company cut corners because that is what the insurance company told them to do. It’s the insurer, after all, who gets to decide the scope of the work, not the person actually looking at what needs to be done. In order to keep costs down,the insurance company may decide on a scope of work that doesn’t go deep enough or get to all the biohazards or may direct the company to use lower quality supplies,chemicals or materials because the company is trying to work within the predetermined costs parameters with more regard to their bottom line than the proper cleanup of your property, In this case, in order to keep work coming in,the preferred provider is more likely to accept the inappropriate boundaries of the job, even if they disagree with it.
Due to these cut corners and lower profit margins for the preferred providers, these companies will try to work as fast as possible in order to get to the next job since they have limited profit on each claim and the quality of the work suffers. Over time,such companies often go out of business or decide to no longer be a preferred provider, thus creating high turnover.
Bio SoCal guarantees all work and you will know the job is done right by a qualified, licensed and experienced company, properly trained technicians using the highest quality Eco-friendly EPA Registered chemicals focused entirely on biohazard cleanup.
What happens when a consumer does not use the insurance company’s preferred vendors?
Insurance companies will often try to scare the client into choosing the preferred vendor by saying they may not pay the invoice and the client will be left to pay it. None of this is true. By law, insurance companies must allow you to choose your own company to do any claim-related work and the insurance company must pay a reasonable and customary industry rate,not what they predetermine is good for them. In addition, insurance companies cannot cause any consumer’s rates to increase on a homeowner policy based on which company they chose to work for them nor can they deny a claim. Homeowner’s rates are regulated and go up annually as allowed by the state insurance commission,regardless of whether you file a claim or what company does the work.
How do consumers know who to call when an emergency happens?
If you are dealing with a biohazard emergency, ask the first responders whom they recommend or do an Internet search on quality companies in your area. When you call them, here are two important things to ask about:
- Are they on your insurance company’s preferred vendor list? If they are, they shouldn’t work for you because they do not have your best interest in mind.
- Can they provide you with copies of their insurance and licenses? Trauma Scene Waste Management Practitioner Licenses are issued by the California Department of Public Health (TSW# 16 & 493). In addition to this, they also need to have general liability, workers compensations and contractors pollution liability insurance coverage. If they are not properly licensed or insured,they are not a company you want providing these types of services on your property and it is illegal for them to provide Biohazard Cleanup services. Statistics show that 90% of all companies that market themselves as insurance claim contractors are improperly insured.
Hire quality biohazard companies
When you take into consideration the requirement that approved vendors have to agree to lower vendor pricing, it should be no mystery why these programs do not attract the best and most qualified biohazard cleanup vendors. These programs are geared to attract the “cheapest” not the “most qualified.”
At Bio SoCal, we are proud of the fact that most of our work comes from local police department referrals and online research and not from insurance carrier’s preferred vendor programs. Bio SoCal’s sole focus and work is Biohazard Remediation and does not moonlight in competencies which we do not specialize in or are not property trained to do,which can not be said for restoration companies.
Call Bio SoCal for quality Biohazard Cleanup
For quality biohazard cleanup, call Bio SoCal 24/7/365. We will respond in a discreet, unmarked truck and take the burden of cleanup and the homeowner’s insurance claims process off your shoulders so you can focus on what’s important – your family.
Southern California Counties Served
Los Angeles County
Phone: (310) 773-4599
Phone: (951) 534-5899
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Phone: (805) 852-1600
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