Sep 232016

Preferred Vendor Endorsements

Preferred Vendor endorsements concern an insurance company compelling a policyholder (homeowner or business owner) to utilize a particular Vendor to complete repairs on any damage the property sustains due to a covered peril such as hurricane or storm damages, abrupt and accidental burst plumbing pipes, smoke or fire damage, burglary, etc. or comparable covered perils. In numerous claims, policyholders have discovered that the insurance provider will only pay to cover the costs if the policyholder consents to assign the insurance provider’s specific Vendor. There are variations of the Preferred Vendor Endorsements depending on the policy. A number of insurers reserve the right or possibly will opt to have their preferred vendor complete the repairs; others may opt to merely pay out what the preferred Vendor decides is the cost to repair. A Preferred Vendor Endorsement clause is habitually concealed in the fine print of many homeowners’ insurance policies. Misleading terms the insurance companies may utilize include Concierge Program, Select Contractor, Managed Repair Program, etc. The insurance providers highlight the use of a Preferred Vendor will save a homeowner on the cost of the yearly premiums. The troubles occur when the Preferred Vendor does not scope the repairs sufficiently, does not complete the repairs appropriately, never shows up to do the job, or creates even further damage. Warning to consumers: Don’t be a penny smart, pound foolish.

Concealed Clauses in a Homeowners’ Insurance Policy

When repairs go wrong with a Preferred Vendor, in many claims the insurance company will refuse to pay for the hiring of a different Vendor. The homeowner is left accountable for this cost out of pocket, breeding even more existing financial hardship. Preferred Vendors can also be referred to as “blanket” or “automatic” Vendors in the fine print of a homeowners’ insurance policy, but the terms represent the same thing. In claims of considerable damage to property by no error of the homeowner, an insurance company will frequently send out the preferred Vendor without first advising or asking permission from the homeowners.

A widespread defense (by the insurance industry) of the use of preferred Vendors is the decline of incidences of insurance fraud, and insurance companies most often allude to this as a reason for the Preferred Vendor Clause prerequisite. Even with the intentions to thwart the filing of false claims, a considerable number of homeowners have run into distress due to this practice. Some of the most serious claims entail the use of managed repair clauses tied to the use of a certain Vendor that the insurance company chooses. As a replacement for of issuing the homeowners payments to hire their own (trusted) Vendors of choice, the insurance company will automatically dispatch their own Vendors. An additional conventional reason insurance companies endeavor to convince the policyholders for this practice is that the preferred vendor saves the homeowner time and exertion spent in shopping for his or her own Vendor. So, if your close relative is a carpenter or general Vendor, you may not use him/her.

The Opportunity of a Public Adjuster

The main problem with the use of preferred Vendors is that the homeowners are removed from the decision-making regarding their own home. Insurance companies dictate what (the scope), when, how (such as quality of work and materials) the repairs will be performed and who will be completing the repairs. Many of the workers are not full time employees of the Preferred Vendor Company and are merely day workers; none having background test. What does this mean? The policyholder may have felons, drug users, and questionable characters in their home or businesses exposing their families to such dubious creatures. Your home is your castle. You ought to be able to select who enters into your home or business. If a homeowner disagrees to any of these requisites, the insurance company will reject the claim (you could also be in breach of the terms of your contract/policy). In some instances, this can even lead to hikes in the homeowner’s yearly insurance premium. Occasionally the preferred Vendor is sent out to initiate repairs before the insurance company’s representative has had the chance to examine the damage. The use of a public adjuster is crucial to help avoid many of these problems associated with Preferred Vendors. A policyholder must contact a public adjuster immediately upon detection of any type of damage. The public adjuster will assess all aspects of the potential claim and provide professional advice, ultimately managing all aspects of the claim for the policyholder. The public adjuster represents the policyholder and has no connections to the insurance company or to any of the retained Vendors. Homeowners always have the option or right to use a pubic adjuster but are seldom, if ever, provided this information from their insurance companies.

Those faced with the required use or where the insurance company has the “option” to utilize a Preferred Vendor are recommended to scrutinize the terms of their existing policies and make changes if they have Preferred Vendor, Concierge Program, Select Contractor, Managed Repair, etc. endorsements. Policyholders should examine their policy to find out if the insurance company has the option to invoke the payout of the insurance company’s Vendors’ estimate or cost determination (to complete the repairs); which are never adequate for the policyholder to entirely recover and be made whole again.

Your insurance policy is a contract and by accepting and paying the premiums you have approved to the terms of the contract or policy. D’Orsa and Associates, LLC will analyze your current policy and advise recommendations (if necessary) at no cost.

Should your home or business endure any type of damage, contact D’Orsa and Associates, LLC public adjusters without delay upon discovery of damages. Our adjusters will handle all aspects of your claim from the filing your claim to the eventual settlement. D’Orsa and Associates, LLC work on a contingency basis: No Recovery, No Fee. For insurance claims help contact (877) 742-3587.

Additional Information on Preferred Vendor Endorsements:

Preferred Vendor Endorsements


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