$$$ Paid but No Work Done Yet $$$ Spent!!!

[Crabcake Johnny]

Knowing nothing about P&C, this is highly interesting - the part about pocking the check being potential fraud.

If my roof is damaged and I get a check cut for $5,000, can I repair it myself and pocket the $5,000? Can I hire by brother-in-law who might happen to be a contractor and get it done for $2,00 and pocket $3,000?

And if I happen to own my house outright, what does the carrier care if I fix my roof or go on a European vacation?

Fraud, to me, would be filing a false claim.

 

[joshb]

You are right, they are signs of insurance fraud, and I do jump the gun and assume its fraud because we deal with it on a regular basis down here. Our carriers have gotten very tough on this, and if they see that the insured has not repaired their home within a certain amount of time, it goes to their fraud department and then we deal with it. In the case where she paid her daughters wedding, the fraud dept. was involved before any payment was made, I'm still dealing with this headache of a customer, and the insurance company wants her to repay a portion of the claim amount, since she did not repair the home. They are also canceling due to existing damage in the home (120 day cancel, they aren't waiting for it to non-renew)
- - - - - - - - - - - - - - - - - -
Crabcake Johnny, theres two kinds of fraud. Theres fraud in the sense that, I burned my house down to collect money, then theres fraud in the sense that, i overinflated my claim, or lumped other things in to get more money (sometimes called opportunistic fraud). Both are fraud. Either way all is unethical. I consider filing a claim for damage that you don't plan on repairing as fraud. Obviously yo ucan live i nhe house with the current roof, thus filing a claim that didn't need to be filed to pocket money.

 

[djs]

John - Yes, if you can do the repairs for less than what the insurance company pays, you can pocket the difference, but there are catches....

The insurance company will write an estimate based on the work to be done. They will write a check to you (and your contractor) for the depreciated value of the repairs, less the deductible, which may buy the parts for the repairs. When the work is completed, an invoice is submitted for the actual bill and the balance (less the deductible) will be paid out, if the invoice is in alignment with the initial estimate.

So now, the only way to get the second check is to actually have the repairs done and to create an invoice for the amount of the repairs. This is where people get burned. No work done, no second check. Did it yourself, no way to create the bill (they may still pay though, based on fair value), brother in law contractor - better actually get paid the money or its fraud.

Because of the depreciated value and the deductible, its tough to actually pocket much money. Remember, replacing a roof is only partly labor. There are material costs as well, which can be significant.

Its not easy to pull one over on the insurance company.

Dan

 

[joshb]

things are different here. there are not usually two checks to go out. As a matter of fact, I have only seen it with supplemental payments (i.e. found more damage, etc). usually a check is written, and the company walks away, and thats the end of it. I don't know if thats a Florida thing or not, but like I said I rarely see multiple payments made. they are in the process of passing a bill right now, that will allow the company to only pay a small portion of the claim, until they can prove damages, are repaired but right now, it hasn't passed.

 

[VolAgent]

I consider filing a claim for damage that you don't plan on repairing as fraud. Obviously yo ucan live i nhe house with the current roof, thus filing a claim that didn't need to be filed to pocket money.

Using this logic, your widow commits insurance fraud when she doesn't use your life insurance proceeds to buy a new husband...

Insurance protects against a loss, plain and simple. Whether you repair, replace or pocket the cash should be your decision.

 

[Crabcake Johnny]

Agreed. If I own my car outright and it's totaled then I get a check. Whether or not I use it to buy a car or go on a ski vacation is none of the carrier's business.

Likewise, if I own my house outright and a tree smashes my patio - just cut me the check. Whether or not I choose to fix the patio is my business.

 

[joshb]

Your insurance policy is not your bank account, and you should not use it that way when your low on money. I stand behind what I say. Lying to an insurance company to collect a benefit, is fraud in my eyes....

 

[GeminiGroup]

Actually, insurance is kinda like your BANK account.
Having insurance is basically holding a "bank marker" against an event happening, kinda like those Super Bowl wagers.

If X happens you get a check for Y, if it doesn't we (insurance company) keep your money. The insured's "wager" is that of X's occurrence once X happens the obligation for the insurer is to pay, period.

The contract at that point, is now valid because the condition in which Y would be due has now been met.
And, there is no absolute duty for the insured to use said funds in any particular manner, unless specifically stated (which it isn't generally * except for a 2nd payment...which is really a 2nd agreement).

A homeowner is welcomed to not fix his A/C, he has the right to be hot and spend his proceeds, elsewhere. He spent the money to have a "marker", just in case an event happened.... no different than the guy that wagered that the Giants would score first on a safety....the event happened he's due the money, period.

The problem is the continued coverage of said item, if you don't fix it great, coverage should then terminate because no "repaired item" exist, so that policy wouldn't be valid. If you lie and continue as if the item was repaired ....paying premiums on a "broken" item, now you've committed fraud.

If you just keep the money and let the coverage terminate, you're fine. Just like a poster stated earlier re: auto insurance really isn't to repair/replace your car it's really for money if an "event" happens.

*Now your also insured (lease/finance) may require you to fix or repair your car via the terms of your loan just like your mortgage company may do so with your mortgage, while it may be common practice because of one's agreement with those 3rd parties, not doing so would not constitute insurance fraud. Yes, your lender could go after you (call your loan) but you haven't committed an crime.

 

[djs]

Somewhat bad analogy, but I get what you are saying. Bad in the sense the insurance 'contract' is valid upon issuance, a payout has nothing to do with making it valid, but is only done if it is valid.

Also, it's not complete on a payout (except life insurance) since you can suffer multiple losses and get each paid. Don't think you can die more than once though (and get paid each time).

Dan

 

[Guest]

Speechless...............