Is it illegal for an insurance company to refer a contractor in New York State?

UPDATED: Oct 1, 2022

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Is it illegal for an insurance company to refer a contractor in New York State?

Hi. I had a fire in my house in Suffolk Co, NY. The insurance company is trying
to steer me to a specific contractor. They are really pressuring me to choose
this contractor. Is it legal for them to do this? A friend told me that this is
not allowed in NY State. If this is illegal, I would like to be able to tell the
insurance company the exact law that prohibits this so they will leave me alone.

Asked on February 28, 2018 under Insurance Law, New York


M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

You raise a very interesting question that raises other questions regarding unfair business practices.  Is the insurance company requiring that you use this contractor to make the repairs? If so, are they guaranteeing the work of the contractor?  This happens a lot in car repairs where insurance companies have designated repiar shops to do their work.  One then would assume that if something goes wrong you have the insurance company to go after as well. Also, it depends on how the policy is written.  I am going to give you a case opinion to read.  I would suggest calling the State Attorney General's Office and asking for someone to help clarify here given your facts. It seems to me that the insurance company has to undertake to make these repairs to use a contractor.  And it may not be "illegal" per se.  But it may not be proper either.  Good luck.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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