Insurance policy holder beware: The property insurance industry needs to make changes
State Farm, ServiceMaster, and Servpro Collude to Cheat Disabled Woman and Her Family out of Insurance Benefits, Ruining Their Home in the Process, Shernoff Bidart Echeverria Bentley LLP Lawsuit Alleges
In the past, property restoration business owners were made or broken by what is referred to as a ‘preferred vendor list’ created by large property insurance companies (i.e. Nationwide, Allstate, State farm, etc.). By becoming a ‘preferred vendor’, national franchise restoration businesses like Servpro and ServiceMaster are able to portray continued worth to their franchisees. Being an insurance company’s ‘preferred vendor’ means a large quantity of restoration work for the vendor, but what does it mean for the policy holder?
First, we need to examine a typical water damage or flood damage restoration claim situation. In the past, a homeowner/policy holder would call their insurance claim line or agent if they discovered a water damage emergency. At this point, they would typically be referred to a ‘preferred vendor’ to do the emergency water extraction and drying out of the property. The term ‘preferred vendor’ is intended to make the property owner trust and therefore use, said vendor for the restoration work. It is also purposely left unclear that the homeowner can hire whomever they would like to perform the work in their home.
Property restoration companies work for the homeowner and not for the insurance companies. All insurance property restoration is held to an industry standard set by the Institute of Inspection Cleaning and Restoration Certification (IICRC) or Clean Trust and all related work is expected to be done in accordance with the standards set forth. All insurance restoration is also held to standardized pricing. This is to ensure that credible businesses are all held to the same quality standard of work and charge the homeowners the same amount for the same services.
To become a ‘preferred vendor’ with one of the large insurance companies, you have to agree to work off a discounted price list or agree to set a limit to drying time in return for a large volume of work. This becomes appealing to restoration business owners who no longer need to spend as much marketing themselves. By sacrificing some of their margins for a higher quantity of work, they are now able to make more money.
This is where the questions of ethics arise: If any restoration business owner, is receiving most, if not all, of your leads from preferred vendor list calls do you REALLY work for the homeowner? Or do you bend to the whim of the insurance company to avoid biting the hand that feeds them? If a restoration business owner is guaranteeing not to charge the insurance company after a set amount of time for drying the structure, what do you do when they reach that limit and the structure is still wet? Do they continue to work, essentially for free? Or do you leave the property wet and move on to the next job? How are they really helping the policy holder cut future costs? One such situation just made the news recently and is getting national attention:
MISSION VIEJO COUPLE SUES STATE FARM OVER DAMAGED HOME, BREACH OF CONTRACT
The public is becoming more informed and starting to see through this process that benefits the insurance company and not the homeowner.
What makes EMERG+NC Property Rescuers unique?
• Unlike every similar company that we are aware of, EMERG+NC Property Rescuers is a ‘direct to consumer’ insurance damage claim service provider.
• Customer’s call us because we are, local, family owned business with high credibility. We’re credible, trustworthy, empathetic and most of all ethical.
Don’t companies similar to EMERG+NC Property Rescuers do the same thing?
• We do not participate in national preferred vendor programs or third party administrated contractor programs. Every other business does.
• We have no ‘back-room deal’ with the insurance companies or their proxies (i.e. 3rd party contractor administrators).
• We work directly for our customers (the end user of our services) and receive authorization from them to communicate directly with the insurance companies on their behalf.
• The reward for our services comes from the fair profit margins made by doing the work correctly following the industry standards (the IICRC: Institute for Inspection, Cleaning and Restoration Certification) a.k.a. ‘The Standards’.
So who do the other companies work for?
• Because Insurance companies are highly regulated, and by law are not allowed to provide property damage contracting services directly themselves.
• To control the process, all insurance companies have created national ‘preferred vendor’ partnerships with large franchise based corporations and/or third party administrative companies (middlemen).
• These middlemen companies agree to provided services to the insurance companies at greatly discounted prices and by agreeing to limit the repairs to a minimum amount.
• These companies work for the insurance companies, not the consumer.
So what happens when a consumer does not use the insurance company’s preferred vendors?
• It is important for residential or commercial consumers to understand that they have the lawful right to hire anyone they choose to perform claim contracting services.
• Insurance companies cannot cause any consumer’s rates to increase on a homeowner policies based on who they chose to work for them.
• Homeowner’s rates are regulated and go up annually as allowed by the state insurance commission, regardless.
So how do consumers know who they should call when an emergency damage event happens?
• Unless a contractor can prove they are not on a insurance company controlled programs, they don’t work for you.
• Unless a contractor can prove they have both General Liability and Contractors Pollution Liability insurance coverage. they are not properly insured to provide these type of services.
• Statistics show that 90% of all companies that market themselves as insurance claim contractors are improperly insured. EMERG+NC Property Rescuers is fully covered. In additional to General Liability EMERG+NC is covered with an all-in-one contractor’s pollution liability (CPL) policy (General Liability + Fungal, Bacterial and Pollution Liability coverage)
What is your next step?
For property damage emergencies, call 919 EMERG-NC… ‘We’ll Respond in a Heartbeat’