Is it "insurance fraud" to get an insurance check & not do the repairs?

[quarterback]

Recently we had some damage to our home, roof, siding, mailbox, windows, deck.   Our insurance has been pretty cool with us but one sticking point is the 'cosmetic damage' to our deck.   Basically the cost of our deck (and potentially 'replacing' it) is more than the insurance wants to pay.

To find out the actual cost to replace the planks that need replacing, we called the builder to get an estimate.  Our insurance had already told us that it would be much more than they were willing to pay, but we wanted to check.  When we called the builder, they immediately wanted to set up a time to come replace the deck.  We explained that we just needed a quote for the insurance but we weren't necessarily going to have the work done.

At this point, the builder accused us of trying to perpetrate insurance fraud.


First off, that's not what was happening at all.  We had no intention of getting a check from the the insurance company for the work and then NOT have the work done.   We wanted to find out the cost to determine whether or not it was worth it for us to risk increased premiums or even being droppped from our insurance due to the cost.  That being said, even if that WAS what we were planning, I don't think that's actually 'insurance fraud'.

I hear, all the time, about people getting check to fix their car after an accident and then not spending all or any of the money to fix the car.    Is that really insurance fraud?  My impression is that you get an estimate and/or the insurance does an estimate and then they cut you a check.  At that point, is it really illegal to not get the work done or only get part of it done?    We haven't gotten checks for any of the other repairs, but if the check is $1 over the actual cost and we don't return that $1, is that somehow 'insurance fraud'    I didn't think so, but this builder certainly implied as much.

[shmokes]

It's not fraud.  If your house burns down you're perfectly free to go on a European cruise rather than replacing each item you lost.

That's my understanding, anyway.  I know that when I got an insurance check after somebody broadsided me I used it as the down payment on another vehicle rather than to fix my car, even though I had to go get an estimate on the car before I could get the insurance check.

[Dervacumen]

I believe the builder is trying to scare you into using his services rather than getting competing quotes and going somewhere else.  That's the only reason I can figure he would say something like that.  Considering you told him you weren't ready to purchase from him he figures he doesn't want to waste his time with an estimate if you're not going to buy.


Anyway to answer your question, in my totally unqualified poosition it is not insurance fraud, he's just a d***.  The whole deal with an insurance payment is to "make you whole" again.  In other words, you've got an agreement with the insurance company to give them some money over time and if something bad happens, they'll give you enough money to take care of it.  That's all.  Once they have paid you, their obligation to you is done.  There's no such thing as requiring you to actually use the money for anything.

You just can't file a claim about that same thing in the future.  So if they give you money to fix the cosmetic stuff on the left side of your deck, you don't do it, and then later a meteor crashes through the right side, you can only claim the meteor crash through the right side.  You can't lump the left side damage into the new claim.  Now That would be fraud.

[shmokes]

Also, I remember when I was about 13 or so a truck had been left in neutral up the street and it decided to take a stroll.  It miraculously went about 200 yards without hitting anything (narrow street where everybody parked at the curb), then rolled across my neighbor's lawn and crashed into the corner of our house, doing some structural damage that required the garage door be replaced, as well as some beams in the ceiling and some exterior stuff.  My dad got the estimate and the insurance check and then did the repairs himself. 

I suppose it could be against the law, but I know that he never had any problems.

[fredster]

You are being compensated for Loss of value.  Find a new freaking builder if that's what he says.

You can call a lawyer and ask him too. They do that you know.  (I guess you did, Shmokes is on his way to being a lawyer).

Your First mistake was volunteering more infomation than necessary. You wanted a quote from him, and you gave him way too much info.  You should have said that you needed the quote for the insurance and just smiled.  What you do with that is up to you, not him.  He doesn't know the facts and is a smart ass. Dump him.

[shmokes]

Heh . . . Even if I had spent one day in law school, let alone finished it, let alone was a practicing lawyer, I still likely wouldn't be able to answer this question better than I already have seeing as I'm planning to specialize in international law. 

[Crax]

That isn't insurance fraud.  You haven't even gotten a check yet.  All you were doing is looking for an estimate.  Also, if the claim is legitimate and covered, you aren't required to spend the money on what they gave it to you for.  Insurance fraud generally consists of making untrue claims or trying to get them to pay to repair your deck from an accident type that wasn't covered.

[shmokes]

Yeah . . . think about it.  If that was insurance fraud there would be a lot less insurance fraud.  How many people deliberately set fire to their store just to collect the insurance and retire on it.  If you HAD to use the insurance money to replace the insured property there wouldn't be much of anything to gain from things like that.

I'm going to go with: you insured that property for its value -- if it's destroyed you get the value.  If the property gets damaged or destroyed you get the value from insurance.  It doesn't matter to the insurance company what you spend your money on.  If you decide not to spend it on repairs that's fine.  You'll have the money, but not the property.  If you fix it you'll have the property, but not the money.  Either way you don't get to have your cake and eat it to and the insurance company is out the same as much money in both cases.

I mean, think of all the property that can't be replaced.  How do you replace a Van Gogh that burns up in a house fire? 

[Spaz Monkey]

<snip>
To find out the actual cost to replace the planks that need replacing, we called the builder to get an estimate.  Our insurance had already told us that it would be much more than they were willing to pay, but we wanted to check.  When we called the builder, they immediately wanted to set up a time to come replace the deck.  We explained that we just needed a quote for the insurance but we weren't necessarily going to have the work done.

At this point, the builder accused us of trying to perpetrate insurance fraud.
</snip>

This guy doesn't know what he's talking about.  You asked for an estimate and the jerk thinks "job".  Just because you ask for a quote does not mean you 're trying to defraud.  He is mistaken.

<snip>
If your house burns down you're perfectly free to go on a European cruise rather than replacing each item you lost.
</snip>

For your home, that's not the case.  Insurance is designed to get you back where you are before the loss.  You may only get the value of your home as is and not what it could be sold for (IE 50 year old house vs 50 year old home on the beach) if you say you're not going to rebuild.  (Think everyone living in FL and leaving after all the hurricanes.)  The homeowners policy should cover the amount to rebuild the home using new materials.  Your personal property might be a different story.  Usually you go out and buy new stuff and the insurance company reimburses you.

I agree with what Dervacumen & crax said ...

If the deck just has cosmetic damage, the insurance company may not have to pay an amount to replace it.

In regard with the Van Gogh, a couple of things could happen.  If you told your insurance company that you had it, it could be scheduled (specifically listed) for a certain amount.  If not, you could get the market value of the item.

And remember, YMMV.  Call your insurance company and find out what they'll cover and how.

[quarterback]

Thanks for all the replies.   That's what I thought, and it corresponds with what I'd heard in the past, but since I've never had to utilize my homeowners insurance before, I thought I'd ask. 

And yeah, the builders (who did our deck) are ---Deutsche Frankfurters---.   Unfortunately I didn't subscribe to Angie's List early enough to avoid them in the first place.  They looked good from the outside (they're a real company with offices, designers etc) but have a real ---smurfy--- business attitude.   And now I know that angie's list reflects that fact as well.  Live and learn.

[DrewKaree]

Tell that jerkoff "Thanks for the legal opinion, but stick to building decks and ripping OTHER idiots off, I'll be submitting more info to Angie's List pointing out what a shady company you are because of your scare tactics to try to drum up business".

I have no idea what Angie's List is, but from what it sounds like, not only should you submit this information to them, but I'd also file a complaint with the Better Business Bureau in your city AND the city their offices are located in.

HOW does that dumbass think you are an authorized agent for your insurance company rather than someone following standard guidelines for obtaining estimates to submit an insurance claim?

What's the name of that company, so anyone else here might never be tempted to give them a dime other than if those asshats are holding a sign saying "Will Scam For Change"

[ChadTower]

While I agree with everyone else on that guy being wrong and a dick, I think he's doing it for another reason.  You want him to come out, on his time, and provide you a service for no compensation.  Why would he want to do that?  So he lies and tries to provoke you into a commitment instead.  Bad ethics for sure but I do see why he would say "we're not coming just for an estimate".  A better way to handle that would have been to charge you $50 for the estimate and if you have the repairs made by them they will apply that $50 to the cost.

[DrewKaree]

While I agree with everyone else on that guy being wrong and a dick, I think he's doing it for another reason.  You want him to come out, on his time, and provide you a service for no compensation.  Why would he want to do that? 

It's called "the cost of doing business".  A good company accepts the "no compensation" part of the business for the opportunity to get the job, perform the service, and build word of mouth, thereby building their business.

He wouldn't want to do it because (my guess) not only are they a crappy company, but my guess is they simply do "serviceable" work at best.

You pose this question as if companies don't already do this all the time for "no compensation".  Companies separate themselves from their competition by the service they offer and the way they sell themselves.  Deciding to refuse to offer estimates for "no compensation" separates a company too, and not in a good way.

If you agree that the guy's being a dick, stop looking for a "good" reason the dick might be making this decision or a way he might handle it better.  There's a reason he's a dick, and it's because what you're describing is the route a dick would take.  A good company gets the reputation AS a good company because they try to avoid the route a dick would take, many times at the expense to the company due to not getting hired to do the job.

[JackTucky]

You want him to come out, on his time, and provide you a service for no compensation.  Why would he want to do that?

Because he built the deck in the first place.  He's helping a customer.  Not some stranger who got his name from the yellow pages.

How's those people skills coming along?

-J

[Zero_Hour]

You want him to come out, on his time, and provide you a service for no compensation.  Why would he want to do that?

Because he built the deck in the first place.  He's helping a customer.  Not some stranger who got his name from the yellow pages.

Or because in contracting or other service related field, Good word of mouth is more valuable than advertising.

A real life example of what Drew was talking about:

Just moved to Phoenix, and now have an in-ground swimming pool, which I knew nothing about. My realtor recommended his pool guy to me. I figured he'd come out have a look see, maybe answer a few questions and charge me for a service call - which would have been just fine by me. Instead, he spent a good chunk of time explaining everything - equipment, maint. schedules, chemicals, etc. to me, and replaced a couple of leaking seals on the filter system - all for no charge.
I think I found my pool guy.

In short, for a small investment of his time, he now has a potential long term customer.

[quarterback]

While I agree with everyone else on that guy being wrong and a dick, I think he's doing it for another reason.  You want him to come out, on his time, and provide you a service for no compensation.  Why would he want to do that? 

Well, FWIW, that's not the situation.  He was never going to come out, we weren't asking him to come out and he knew that.   The company is the only one that has the exact plans for our deck so we just needed them to tell us how much it would cost to replace the trex.   We had called earlier and talked to somebody else.  They said they'd have the plans pulled up and somebody would call us back with the info.

After being rude on the phone and accusing us of insurance fraud, we explained to him that we simply needed the price and our decision couldn't be mde without that knowledge.  He had our plans in front of him already (because we had called earlier) and he did a quick calculation coming up with a figure of about $1,400 to replace approximately 65 sq ft of Trex   

[quarterback]

This is the company.

The work they did was fine.  The problems we had/have with them is that it took them over 3 summer (not snowy or rainy)  months to complete our small deck and patio.   They were not responsive to our inquiries, missed appointments, wouldn't call before showing up and were, on occasion, simply rude.  Of course, none of these things were factors until after we'd signed the contract and given them a chunk of cash.   Prior to that, everything was helpful and great.   

Also, we didn't end up getting exactly what we thought we were getting but we accept partial blame for that for not asking more specific questions.  We bought a "trex deck" but, in the end, things like the railing and parts of the steps are not made of trex.  We presumed a 'trex deck' meant all the fiunctional parts were trex, but they were not, even though their photo-book showed previous projects where that was the case.    So even though there's nothing in the contract that guaranteed that 100% of the surfaces would be trex, I still feel a bit misled.

And, finally, the price was high. 

The price issue was one that we accepted up front.  It wasn't a bait and switch.  We decided we were willing to pay more to go with a 'real' company instead of a contracter working out of his truck.   The idea that we could go to a showroom, look at material, call an office where actual people actually worked (not a cell phone in 1 guy's pocket) and that the company would be locatable in the event that something horrible went wrong were all worth it to us.   

We'd had minor issues with contractors before and everybody knows somebody who got screwed by a fly-by-night contractor.  So we figured that, to a certain extent, "you get what you pay for" and that we'd pay a little more for the peace of mind of using a 'reputable' company.   So much for that idea.

[JackTucky]

Contractors are mostly jerks.  I have a good friend who is a contractor, he actually answers the phone, talks to customers, is nice, etc.  BUT, mostly, they don't call back, take money, do lousy jobs, show up late, miss days.

Jacktucky

[ChadTower]

I was trying to post as Devil's Advocate from his point of view.  I even said that I agree he's a dillhole and was acting like a dillhole. 

[mccoy178]

Quarterback, did you have damage from those two storms that happened on back to back Wednesdays in September?  Those were some strong storms.

FWIW, I charge $75 for my pool estimates.  I let homeowners know the deal before I come out and I also apply it towards the project if they hire me.  I have base rates that I give home owners before I come out so I'm not pulling a shock and awe campaign to make estimate money.  I used to do them for free, but I don't really want to go to someones house unless they are serious about hiring me.  I'm a small company and in my line of work there is just too many customers to do estimates for free.  I would be working in the field 24/7.  Again, I try to give the homeowner as complete pricing as I can over the phone, but I can't give them a concrete number until I can evaluate the situation.  I've never had anyone complain in six years.

[Wade]

It's not fraud to spend the insurance settlement however you want.  It is fraud to CAUSE the damage, to try to fake the damage, or claim damage/loss on something that never existing in the first place.

Common examples: burning down a business or house to get the insurance settlement (because the business is worthless and the settlement is worth more), "stealing" a radio from your own vehicle to get the settlement, purposely wrecking a vehicle to get the settlement, etc.

The vast majority of homes/business that burn down are arsoned, usually intended for insurance fraud.

Wade

[Negativecreep0]

not fraud plain and simple. I totaled my truck got 30k from the insurance company decided gas was too much to drive a truck around kept the 30k. That is why you pay to have insurance.

[shardian]

not fraud plain and simple. I totaled my truck got 30k from the insurance company decided gas was too much to drive a truck around kept the 30k. That is why you pay to have insurance.

Heh..you mean you gave the 30k back to the bank to pay off the loan.

[ChadTower]

FWIW, I charge $75 for my pool estimates.  I let homeowners know the deal before I come out and I also apply it towards the project if they hire me.  I have base rates that I give home owners before I come out so I'm not pulling a shock and awe campaign to make estimate money.  I used to do them for free, but I don't really want to go to someones house unless they are serious about hiring me.  I'm a small company and in my line of work there is just too many customers to do estimates for free.  I would be working in the field 24/7.  Again, I try to give the homeowner as complete pricing as I can over the phone, but I can't give them a concrete number until I can evaluate the situation.  I've never had anyone complain in six years.

If a former customer called and asked for a quote to repair cosmetic damage to the pool you built, would you charge them for that estimate?

[mccoy178]

FWIW, I charge $75 for my pool estimates.  I let homeowners know the deal before I come out and I also apply it towards the project if they hire me.  I have base rates that I give home owners before I come out so I'm not pulling a shock and awe campaign to make estimate money.  I used to do them for free, but I don't really want to go to someones house unless they are serious about hiring me.  I'm a small company and in my line of work there is just too many customers to do estimates for free.  I would be working in the field 24/7.  Again, I try to give the homeowner as complete pricing as I can over the phone, but I can't give them a concrete number until I can evaluate the situation.  I've never had anyone complain in six years.

If a former customer called and asked for a quote to repair cosmetic damage to the pool you built, would you charge them for that estimate?

If it was damage not created by me, then yes.  My business is just like any other.  A homeowner is given a grace period to notice and report issues with an install.  If there is an issue that falls outside of that window,(usually a season), then the job is chargeable.  I charge for the estimate because I hate companies who give estimates over the phone for something that has too much grey area and also because the number I give them is concrete.  Again, my biggest issue is time and I am only looking for serious customers.  My line of work is filled with shady characters because it is seasonal work.  I feel that after a customer is done talking and meeting with me, they feel comfortable that the job will be done right and are willing to pay to have the job done correctly.  So when former customers call me, they already know what to expect and are willing to pay for it.

[ChadTower]

Sounds thoroughly reasonable to me.  Apparently some here think that is poor practice.

[DrewKaree]

Sounds thoroughly reasonable to me.  Apparently some here think that is poor practice.

What a decidedly simplistic view of what obviously seems to be exactly what I laid out above.  My guess is that McCoy is successful due to

Companies separate themselves from their competition by the service they offer and the way they sell themselves.....A good company gets the reputation AS a good company because they try to avoid the route a dick would take, many times at the expense to the company due to not getting hired to do the job.

You'll also find that no one has stated that it WOULDN'T be a good practice, that McCoy has stated that his customers know up front WHY and WHAT he would be charging them, and how his business practices work.

All that before he'd ever step foot on their property, and you're simply attempting to equate McCoy's seemingly decent business practices with those of someone you yourself find to be a dick.

You know perfectly well that what McCoy described is nowhere NEAR what was described by the dick, and to pretend as if it is an equivalent is ridiculous

[fredster]

When you total a car, I think you have to give up the title to the Insurance company.

If your house burns down to the ground, I'm not sure if you have to give up the property or not. I believe you do, but it should be part of the contract.

It took 3 freaking months to build a deck?  That's a 2 day - 4 cases of beer - kinda project, even if there is fancy materials.

[ChadTower]

The car doesn't have a separate title to it the way a property and house do.  You can own a house without owning the lot and vice versa.

Besides, you don't get compensated for the value of the house.  You get compensated for the cost of rebuilding an equivalent house.