You are not required to use a preferred contractor from your insurance company’s list, and Colorado law goes further than that. Your insurer has to tell you so.
Colorado Revised Statutes section 10-4-120 requires an insurer or its agent to inform a claimant that they may select any repair business of their choosing. The insurer may also offer a list for consideration, but the disclosure of your right comes first (codes.findlaw.com/co/title-10-insurance/co-rev-st-sect-10-4-120/).
If water or fire has damaged your home, call 303-816-0068. American Restoration answers 24/7 across Lakewood and the mountain communities.
What a preferred contractor program actually is
A preferred contractor program is a business arrangement between a carrier and a set of restoration companies, not a rule that binds you.
Carriers call these programs by various names. Preferred vendor. Managed repair. Direct repair. The structure is similar in each case: the contractor agrees to pricing terms, documentation standards, and volume expectations, and in exchange receives referrals from the carrier.
None of that is inherently improper, and some preferred contractor firms do good work. The thing to understand is who the arrangement is between. The agreement is between the contractor and the insurer. You are not a party to it.
What Colorado law requires
Section 10-4-120 sets out several duties that sit alongside the disclosure requirement, and they are worth knowing as a set.
The statute requires an insurer to disclose, orally or in writing, that a claimant may freely choose any repair business. It further requires that any estimate prepared by or for the insurer covering damage visible at the time of inspection be adequate to restore the property to its pre-loss condition within a reasonable time, in accordance with policy provisions. It requires payment for repair services based on a prevailing competitive price, established through competitive bids, accepted insurer methodology, or market surveys. And it requires the insurer to assume reasonable costs sufficient to pay for repairs, less the deductible.
Read together, those provisions mean the carrier owes a scope adequate to restore the property, regardless of which contractor performs it. Choosing outside the preferred contractor list does not reduce what the policy owes.
Why homeowners think they have no choice
Because the way a claim unfolds makes the list feel like an instruction rather than an option.
The adjuster mentions a program. A name arrives by text within the hour. Someone calls before you have finished mopping. The sequence creates an impression of a process already in motion, and a homeowner standing in two inches of water is not in a position to interrogate it.
Nothing in that sequence is a requirement. If you are told or led to believe that you must use a preferred contractor, or that your claim will be delayed or reduced if you do not, that is worth raising directly with the carrier and, if it persists, with the regulator.
When a preferred contractor makes sense
Sometimes it is the right choice, and it would be dishonest to pretend otherwise.
The programs exist because they streamline things. Billing runs directly between contractor and carrier. Scope disputes are less frequent because the pricing is pre-agreed. For a straightforward loss where the homeowner wants minimal involvement, a preferred contractor can be the path of least friction.
What you trade is independence in the scope conversation. A contractor with a volume relationship to the carrier has an interest in that relationship continuing. On most jobs that interest never conflicts with yours. On a job where the correct scope is larger than the carrier’s initial estimate, it can.
What to consider when choosing instead
Judge any restoration company, preferred contractor or otherwise, on documentation and credentials rather than on response speed alone.
Ask what certifications the technicians hold. The IICRC standards govern water restoration and mold remediation, and certification to them is verifiable.
Ask how moisture is documented. Readings taken on every affected material, logged daily, and compared against unaffected material in the same building are what establish that a structure was wet and later dry. Thin documentation is the leading cause of scope disputes. How a water damage claim works covers what that file needs to contain.
Ask who performs verification. On mold work, the company doing the remediation should not be grading its own clearance.
Ask for a written scope before work begins, and confirm the company carries its own liability coverage and workers compensation.
What does not change if you choose your own
The policy limits, the deductible, and the covered scope are unaffected by which contractor you select.
Your deductible is yours regardless. Any offer to absorb, waive, or rebate a deductible should be treated as a warning sign about the company making it rather than as a discount.
Coverage determinations are unaffected as well. Whether a loss is covered turns on the cause and the policy language, not on the contractor. Mold coverage works the same way regardless of who performs the remediation.
What can change is scope, in either direction, which is why documentation matters more than the logo on the truck.
If you are being steered
Ask for it in writing, then contact the Division of Insurance.
A carrier that will state in writing that you must use a preferred contractor is making a claim that runs against the disclosure requirement in section 10-4-120. Most will not put it in writing, and that itself resolves the question.
The Colorado Division of Insurance investigates complaints and assists consumers with the claims process. Their consumer services line is 303-894-7490, and complaints can be filed through their website (doi.colorado.gov/news-releases-consumer-advisories/consumer-advisory-divi…).
The bottom line
You choose. Colorado requires your insurer to tell you that, and the obligation to pay a scope adequate to restore your property does not depend on which company performs it.
A preferred contractor may still be the right choice for a simple claim. Make it a decision rather than an assumption.
American Restoration has operated in Lakewood and the surrounding mountain communities since 1996 and holds IICRC Triple Master Certification in Water Restoration, Fire and Smoke Restoration, and Textile Cleaning. If your home has been damaged in Lakewood, Morrison, Evergreen, Conifer, Pine, Bailey, Kittredge, or Littleton, call 303-816-0068.
