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Help! Need advice about old insurance claim

1,341 Views | 10 Replies | Last: 7 yr ago by $240 Worth of Pudding
$240 Worth of Pudding
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AG
Need some advice relating to a home insurance claim

I'm hoping that some of you are in the insurance biz and that maybe even the lawyers could chime in (with the understanding that none of this is binding legal advice).

I'm going to try to make a very long story short.

In 2012 had a bad hail storm. Hired a contractor to fix roof. Was given a check for a little over $6K from insurance for this (roof-depreciation-deductible=~$6K). Gave the entire amount to contractor.

While doing the work, contractor discusses with me about adding a supplemental to the claim to repair the pool deck that was beat to hell from the hail as well as a new fence. I tell him fine, he does so and the insurance approves it. Insurance sends me a check for a little over $11K.

Now, here's where it gets sticky: The contractor is my cousin. Nothing was signed, everything was done via handshake. Yes, stupid in hindsight but what's done is done. We agree to postpone the pool work until we can save up enough money to have other things done with the pool at the same time but obviously on our own dime.

A couple of years go by, I give him $10K as a sign of good faith.

Fast forward to now, we are ready to have the work done. He is now claiming that all monies paid to him were for work related to the roof and that I need to contact the insurance company for more money.

So long story short. He's made off with 10K that was supposed to go to fix my deck claiming that he never got full payment for the roof after it was completed. Nevermind the fact that he never told me to submit for final payment. I just assumed that the first check I got from the insurance company was the only one I was getting for that.

I know I could take him to court but that's really not something I want to do, but I'm willing to explore all options.

At this point, my main concern is whether or not I am somehow liable for that money since the insurance company sent me the check and the work was never done. Am I subject to some sort of insurance fraud charge?? They are aware of the situation by the way.

Thanks.
thaed137
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AG
I'm a little confused on the story..

So insurance gave you one check for $11K? or one for $6K and one for $11k?

You paid him $10K for $6K of roof repairs and $4k down payment on future pool repairs or $6K for roof and then $10K for payment for the pool?

1) As I am sure many will say it's always tough to work with family and you should have got that in writing.

2) I would not have paid so much up front for future work, Cousin could go out of business, you could change your mind, etc..

3) You're best bet is to get something from the insurance or what not that shows the original $6K for the roof and the $10K for the pool (pool/roof depending on answer for above) and see what he says to that. If he holds firm in the face of the evidence then he is just trying to screw you. Most likely he has already spent the money he got and doesn't have the cash to do the work and so is hoping he can just have more free money.

4) Read your insurance policy to know what is/isn't allowed around the money they gave you. If you are all in the clear I would call your insurance company and try to get them to pressure your contractor. Make them put the pressure since it is family and that can be tough.


I'm not a lawyer just my opinions.
Harkrider 93
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AG
What was to total bill for the roof repair? If the approved cost by insurance was 16k, and they sent you 6k (after depreciation/deductible, then you would still owe the roofer 10k.

I think turning in receipts and proof of completion can get you some of the money back that is withheld from the insurance company.

I only know some of this because I went through this a couple years ago.
Harkrider 93
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AG
I guess you own your house outright? A lienholder usually wants proof of work done. There were some things we received money for but didn't replace. Insurance didn't care, but they said we couldn't get some of the money back that they withheld until we provided receipts.

They gave us $5k for patio furniture and withheld $200. I just kept the $5k and the scuffed up furniture and kissed the $200 goodbye.

Only concern would be what kind of damage could happen due to you not fixing it? You would be responsible for that new damage. For example, didn't repair shingles missing for 2 yrs, which then caused water damage and mold.
$240 Worth of Pudding
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AG
Sorry for the confusion. I'll try to clarify.

First check was for $6K and change. Gave every bit of it to him.

Next check was for pool deck/fence and was for $11K and change. I gave him $10K of that to help cover my deductible (which was ridiculously high at the time) as well as an upfront payment for the deck work to be done.

I'm still trying to sort it out, but as I'm starting to piece it together, he's now claiming that they should have been paid more for the roof, though he never once brought that to my attention or asked me to contact the insurance company. He's now taken that $10K and saying that it went for remainder of roof payment.

Also, no, I don't own the house outright. The mortgage holder had to endorse the check before I could cash it because it was over $10K.

Now, let me add another fly to the ointment. We are moving to a different city. There is a contract pending on the house...........

I feel like I'm taking crazy pills.
Dr. Doctor
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AG
You are liable for the money, as in the insurance company gave you cash to fix your house. If that didn't happen, or it isn't enough, then you pay the rest.

Get contracts for work.

Don't work with family.

IANAL, but unless there is communication/emails/writing, it will come down to he said/she said in court and I could see the court not wanting to entertain that.

Never pay for work until it is done. If they claim they need the money for supplies, then have them bill you or you pay for it (go with them). There are quite a few horror stories on the Home Improvement board about contractors walking away with the whole project's money, not doing the work then coming back and putting a lien on the house for 'lack of payment'.

Money is the only leverage you have, short of having their property.

~egon
DadAG10
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Depending on your policy type.

If they paid the depreciated amount and you didn't repair, that is not insurance fraud.

If you submitted for and received full replacement and did not replace/repair then that would be insurance fraud.

Most policies have a time frame (typically 6 - 12 months) to submit for the holdback (replacement costs) or to request an extension. I doubt insurance would make any additional payments nor would they go after cousin.

There is a thread on the GB about distancing from relatives.
Harkrider 93
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AG
There is a chance that he isn't hosing you. He might be, but what he is telling you can be true.

The offer on the house puts a kink in some things for complete resolution reasons.

If the roof cost more, then you can have insurance pay for more, but the roofer would have to get some data for you to do that. That doesn't mean the insurance will approve it, but it is very common for them to cut another check because of other issues roofer find when replacing a roof.

You should either try to talk with someone at an insurance company or maybe even call your insurance rep to see how to best handle it.

Even asking on here what you should do or the next step to take.
03_Aggie
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quote:


A couple of years go by, I give him $10K as a sign of good faith.


This is what jumps out at me. If it was for the roof I don't see him letting you sit on the money for a couple of years. That would mean he was willing to float you a $10K "loan" for a few years.
OnlyForNow
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AG
Did he ever give you an invoice.? Sure doesn't seem like it.
Burdizzo
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AG
I recently suffered hail damage to my roof. My adjuster looked at my roof and declared it a total loss. He cut me a check for his replacement estimate minus depreciation minus deductible. It is now up to me to hire the contractor to replace the roof. Once completed, I can submit back to the insurance company and get reimbursed for the total cost of the replacement minus the deductible minus what has already been paid. Insurance will not reimburse the cost of upgrades (I plan to replace roof turbines with ridge vent and soffits) or repairs unrelated to the claim (deferred maintenance on some facia).

If you "contracted" with a cousin without a contract, without invoices and receipts, did thousands of dollars in work on a handshake, didn't keep good records, and didn't keep track of what you were using your money for, I would close your claim as the adjuster and wish you good luck.

Dude.
$240 Worth of Pudding
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AG
Yeah. I screwed up majorly. I realize this.
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