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Question DetailsAsked on 3/19/2017

My insurance took deductable off my check so do i have to pay it to contractor hired since the quote was the same?

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Insurance pays the "net adjusted claim amount" which is the approved ("adjusted" in insurance parlance) value of the claim minus deductible and minus depreciation (if you don't have replacement cost insurance). So - you have to be very about the contract phrasing - because if the contract says you pay the adjusted claim amount, that might mean the full value of the damage - what the insurance company thinks it will cost to repair - meaning after the insurance company pays the NET adjusted claim amount you would be paying the contractor the deductible and the depreciated amount of the claim out of your pocket. [Depreciated amount - the estimated used-up value of the roof - so say 25 year estimated life roofing and 15 years old, you would get (with a depreciated value policy) the remaining value of the roof - or 10/25'ths of the adjusted amount, minus deductible. The "depreciation amount" in that case would be 15/25'ths of the adjusted value of the replacement - the portion o fthe life of the roof they say was gone before the claim event and hence not inurable because it was normall wear and tear on the roofing.]


Alternatively, if the contract said the contractor gets whatever the insurance company pays you, you would pay him whatever the amount of the check is (or sign it over to him when payment time comes around).


If you have replacement cost insurance, commonly the insurance company pays you the depreciated value minus the deductible when the claim is approved, which you can use as a down payment to the contractor if desired or called for in the contract - then when the work is done and approved they pay you the rest - the depreciation amount.


With replacement insurance, if the quote was for the gross adjusted claim amount - the amount the insurance company said the replacement is worth - then if the insurance check is for that amount minus your deductible (which I think is what you mean) then yes - you would pay the deductible amount out-of-pockedt to the contractor when payment is due. [Not necessarily immediately - a substantial amount should be held till the work is completed and approved, and inspected by city and/or insurance company as applicable.


Now one caveat - in general, both by contract and by state law in many cases, you have to pay the deductible - if you end up not paying it for any reason (contractor discount or whatever) geneally you are required to pay that amount back to the insurance company, because they are only covering losses in excess of your deductible - that amount it is understood (and in print in the insurance contract) is your out-of-pocket responsibility for any claim. Discounting or repayment to you by the contractor of the deductible amount are in almost all if not all states an illegal form of insurance fraud and an illegal kickback, which can get you jail time plus blacklisting by all insurance carriers - potentially for ALL types of insurance including auto, etc.

Answered 1 year ago by LCD




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