Homeowners Say 'Preferred Providers' Provided Shoddy Work

When water, or fire or an earthquake hits your house, you call your insurance company. And often, your adjustor points you toward a "preferred provider" to fix the damage. But as KIRO 7 Consumer Investigators uncovered, even a so-called "preferred" provider might leave your home in shambles.

Arleen Watkinson's home looks beautiful. It's what you don’t see that worries her.

“I don’t know if I should be living in the house,” she told KIRO 7 Consumer Investigator Amy Clancy.

Back in 2003, while Watkinson was living in California, a fire destroyed most of her Whatcom County home. Before she had even called her insurance company, Watkinson claims she received a call from a local contractor “telling me that they were working with my insurance company and they wanted to do the job.”

Watkinson says she agreed to hire the contractor because she “was told that, because they were the preferred contractor of my insurance company, that my insurance company would work hand-in-hand with them to ensure that the job would be done professionally, and I had assumed, properly.”

But Watkinson claims the house isn't safe. She’s collected a book of photos taken during construction that she says support her belief her house was not re-built to code, and that the contractor didn't always get the proper permits, or always tell the truth.

Robb Dibble, a structural engineer of Dibble Engineers, Inc., was hired by Watkinson to inspect her home.

Clancy asks Dibble while visiting his Kirkland office, "is the house currently up to code?"

Dibble: “No.”

Clancy: “What problems did you find?”

Dibble: “Numerous issues. Up at the roof, there’s water dripping from the roof nails that were installed. There’s black mold on the underside of the plywood in the attic area.”

Clancy: “Is the house connected to the foundation?”

Dibble: “From the areas we looked at, no. Or marginal at best.” Dibble adds: “there could possibly be a structural collapse. There could be problems at that occur. The building will shake in an earthquake and it will not perform well.”

Yet, Watkinson’s home apparently passed inspection.

And for the past six years, Watkinson has been battling both the contractor and her insurance company in court. Arbitration is scheduled for this June.

Meanwhile Watkinson tells KIRO 7, “I’m frustrated because I had hoped my insurance company would help me with this.” She adds “just because your insurance company recommends a contractor doesn’t mean you’re getting a good one.”

Marg Wade of Seattle found herself in a similar situation. After water from her dishwasher damaged her Ballard home, she called her insurance adjustor, who she claims recommended only one contractor. “And I said, ok, that’s fine, because I didn’t know anybody that did those jobs” she tells Clancy.

After workers dried-out Wade's home, the contractor recommended by the insurance company sent a subcontractor, Wade says, to fix all the damage, but she later learned he was licensed by the state of Washington only to paint and install cabinets.

Wade claims the sub’s work was unacceptable and that he also bought personal items with her money.

Wade ended up not paying for those additional items but claims the subcontractor strong-armed even more money from her. She tells Clancy “he followed me to my bank and waited outside the door of my bank and he told me he needed about $500 to $600. And I know I was really stupid to give a man $600 that I was scared to death of, but that’s how I reacted to it.”

Wade complained to her insurance company but says she still had to pay out-of-pocket to have her home fixed properly. And she also claims her insurance company didn't care, even though it was the one who made the original recommendation.

“They did not care that he was double billing,” she tells KIRO 7. “They did not care that he did not do a good job. The only thing they were interested in is, 'Did he complete the work?' And I said, 'no.'”

KIRO 7 Consumer Investigators brought both the Watkinson case and the Wade case to Washington State Insurance Commissioner Mike Kreidler, who is now also asking questions about so-called "preferred providers" that insurance companies recommend.

Kreidler says insurance companies “have a responsibility to make sure that the people that they’re recommending meet legal requirements to actually be doing the contractual work. Their reputation as a company is at stake, and more importantly, we as a regulator have an interest then that they need to meet that standard.”

Kreidler says consumers should know they do have a choice: That insurance companies should provide policy holders with a list of preferred providers, not just one.

The Washington State Department of Labor and Industries, the agency that oversees contractors, agrees, warning that even with a list of preferred providers, homeowners should all do their own homework. Shari Purvis-Reiter of L & I tells Clancy, “you want to know who’s coming in your home. Any subcontractors that might be coming to do a job, as a homeowner I would want to check their licenses no matter who sent him to me, an insurance agent, a realtor, an architect. You still want to do your homework and find out who you’re letting in your home.”

Because of Marg Wade's complaint, L & I fined the subcontractor and suspended his license. Wade’s insurance company had no comment when Clancy asked how a not-sufficiently licensed subcontractor was sent to repair her home.

Arleen Watkinson’s insurance company assured Clancy it would never encourage a contractor to contact a customer before an adjustor had even seen the damage, as Watkinson claimed happened. Watkinson’s insurance company, and Insurance Commissioner Mike Kreidler say, if a contractor contacts you before you talk to your adjustor, consider that a red flag.

The Insurance Commissioner also tells Clancy, his office may be able to help Wade, and has opened an investigation. But Kreidler says his office cannot help Watkinson, since she's already seeking legal recourse.

If you'd like to check-out a contractor, click here.

For more advice from the Washington State Insurance Commissioner’s office on what to expect when you file a claim, including more information on so-called “preferred providers” click here.