05/18/2026
So, this is going to be another fairly lengthy post!
Let's talk about insurance vendor programs...
For almost half my carrier I have been in the vendor programs. About 10 years ago I had the chance to manage a company that was not a vendor. In many ways it confirmed things I already new. Something that it confirmed was the cost to my business. Financial, emotional and morale within the business.
First how do you get to be a vendor? No not anyone can be a vendor there is some vetting that happens. On the surface the vetting process seems pretty stringent. It is just that on the surface. They don't verify anyone below the owner or manager has experience or training. This is a fact! I've seen it many times.
The company pays a fee to be on the program in many cases they also kick back a percentage of the claim volume to the program. If you are part of a franchised system, you had a little more verification and you paid another fee. Seeing a trend here? $$$$
Part of what you agree to in addition to the money you pay is the Service Level Agreement or SLA. I think most homeowners and just about all insurance agents would have a fit if they ever actually read the one for their companies. The SLA outlines what happens in the vendor office as to how the claim is handled. When is the insured contacted, how long it takes to get onsite and reporting back to the carrier. Sounds good right?! What you don't see is the labor burden that is put on the offices to meet these requirements. So an office already paid a bunch of money to be on the programs in the hopes that they see enough volume to pay for itself. Now, for a business doing under $500K they have to hire at least one person to handle these requirements. At least one! And that person needs to know the SLA inside out, understand drying standards and how to write an estimate in multiple estimating platforms. Did I mention that almost every vendor program has its own reporting software! This person is not an easy person to find and is in high demand(which means expensive). So more money! So far this is all the businesses headaches because these are all costs that they eat in addition to paying all of these fees! Now, more money issues! So part of the SLA dictates what line items that they can charge for and how much! It doesn't matter if the task was performed if the SLA says it is not a billable item, then you just ate another chunk of change. I see money just evaporating! So again, this is all the businesses headache so far.
Here's where it really starts to affect the homeowner. Many SLA's say no demo unless approved by the adjuster before the work is done. Huh? I'm the expert and I am going to have to wait for someone that probably has never touched a job to tell me what to do. Well, time is critical when you have a house that is wet. But ok! So, as the lead onsite I call the adjuster and leave a message! Then I call again and leave a message! and again, and again! But wait this is the exception, right? Wrong! I cannot tell you how many times that I never got permission to demo. Recently just walked a house where the insured has lung cancer! I was there for the repairs. I see things that should have been removed that weren't touched. I asked the mitigation manager why and his response was the adjuster never called us back. We took moisture readings and it was still wet months after the fact. This happens all day everyday, all across the country! One of my favorites in the SLA is you can't exceed 3 days of drying without permission. Well from a liability standpoint you can't leave the house wet but the adjuster never calls you back. You end up drying for 6 days and bill accordingly. Then you get the phone call from the adjuster. Hey, I don't see that you ever received permission for the additional three days of drying. Response, I could never get anyone on the phone. Adjuster, you have to remove all charges for the additional time. This can be big money! These are just a few things that directly affect the homeowner. Does any of that sound great? I was involved in over the last several years at least 12 cases that the SLA was followed but the house was still wet. All of the cases were vendors!
I'm not doing to say that all vendors are bad and all non-vendors are good. But think about it, the vendors are pinching pennies to make things work they are taking some huge hits all in the name of promised work. Do you really think that they are going to hire the best people, invest in training or invest in the latest technology? No, probably not! I've seen some really bad non-vendors as well. Usually, they just don't know what they don't know!
This job is very technical! It is a lot more complicated than just tear stuff out and throw some equipment into the house. Our jobs are priced to reflect the expertise that is needed to do the jobs correctly and these vendor programs don't take that expertise into account.
Most claims are filed by calling the 1-800 number for your insurance company and not by calling the agent. When you call the 1-800 number the dispatcher sends you to the next person in the rotation. They are not sending the most qualified company to you. Talk to your agent or look up local companies don't just let someone into your house that is going to take short cuts! Hire experts to assist you if needed to help you verify work, drying, repairs or guiding that local guy that just doesn't know what he doesn't know.
A lot of this post was about money but most of us that do this for a career aren't just in it for the money. We do it because we really love some aspect of the industry or just helping people. The money is important because it enables us to keep doing our jobs better!
