There is no right answer; consider the pros and cons and make the decision that is right for you. Insurance carriers are slowly moving away from developing their own list of preferred contractors. Instead, they are associating themselves with contractor networks. The contractor network acts as a middleman between the insurance company and the individual contractor, verifying the legal requirements, licenses, insurance, and reputation of the contractor, and most importantly, assuming all the liability. So if you agree to have a preferred contractor do your repairs, it will be the contractor network that guarantees the work, and it will be the network that assigns the contractor to your loss. Additionally, the vendor that was sent out for emergency repairs may also be part of a specialty network that supplies mitigation vendors and single-trade contractors, such as drywall installers, masons, etc.
Pros
If you choose to use a preferred contractor, the insurance company or the contractor network or specialty network will guarantee the workmanship and materials. That means if the repairs are done improperly or the materials fail, you have recourse to get it corrected; there is a higher level to go to with your grievances. If the repairs are not progressing as quickly as they should, the work is not what you contracted for, or the contractor's employees are stealing, you would first talk to the contractor, but if he is not responsive, you can go to the insurance company or contractor network with your complaints. Even though the individual contractor is not an employee of the insurance company or contractor network, considerable pressure will be applied if your grievances are valid and provable.
The insurance company has already verified the contractor's license and insurance.
The insurance company and/or the contractor network will probably be around for some time, so fear of the contractor filing bankruptcy before the job is done or not standing behind the repairs is minimized.
If you don't know any contractors, these networks are a good resource to obtain recommendations.
If your damage is due to a catastrophe, contractors are at a premium because so many other homeowners are in the same boat as you are. The insurance company or the networks have nationwide connections that can bring additional resources to the area to meet the high demand for contractors and tradesmen.
Cons
You signed the construction contract, so you are technically the "customer" but these preferred contractors are motivated to please the source that brings them work, the insurance company. This can work for you or against you; in the case where you think the damage is greater than the estimate is addressing, the contractor will more than likely support the insurance company's opinion.
For these types of contractors the work from insurance claims departments is their bread and butter. Even if you have your own contractor, the adjuster will pay one of their preferred contractors to write an estimate. Any estimate they write will probably be favorable to the insurance company.
You still need to do your due diligence and check out these preferred contractors, get recommendations, check with the Better Business Bureau, or, if your state requires contractors to be licensed, check for complaints.
If your insurance company uses a contractor network, the network simply assigns the "next up" contractor in your area. You lose control of the quality of the contractor and, instead, must depend on the quality of the contractor network your carrier is connected with. Find out as much as you can about the contractor network; if the insurance company is not forthcoming with that information, pass on using their contractors.
