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Question DetailsAsked on 7/7/2014

Does my insurance company's estimate act as a contract between home owner ( Texas) and roofing contractor?

My roofer promised to fix my roof and do all sorts of extras. He did the roof and not all the extras. I paid him $15,000 He now wants my recoverable depreciation $6000 and my deductible $4000. We never signed an agreement. He is claiming my Insurance company's estimate to me is " the agreement" or contract between he and myself. Therefore, he claims, I must pay him everything written in my claim. I started to investigate and ask the roofer for invoices. I found he was trying to submit false supplemental claims to my insurance company. I have copies with dates and everything..what to do?

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3 Answers


Unless you assigned the claim to him (a BAAAD thing to do), the estimate is a contract only if you signed an agreement with him to that effect - and he would then be obligated to do everything the estimate called for.

With no contract with him, you are in a very bad position - sounds like one of these scammers that go around after storms telling people they have roof damage and that they can take care of it all for them. And paying him the $15,000 (presumably the oral agreement amount ?) was his payment - the recovered undepreciated amount is money from the insurance company to you to pay for the damages (partial) and does not go to him IN ADDITION to your contract amount - and the deductible is not "cash" at all - it is how much of the claim you have to pay before your insurance covers anything.

For instance, in your case, with $4000 deductible you would be paying that amount before the insurance paid anything. If they gave you $6000 as the payable (undepreciated) value of the roof that would mean for a $15,000 bill you would be paying $4000 deductible, the $6000 from the remaining life of roof value payment, plus $5000 additional.

To start off - $15,000 for roof damage is WAY out of range for a normal repair job - you could normally get a total reroof plus some sheathing replacement on about a 3000 SF roof for that amount, which means probably a 2500SF or so footprint if single story, or about 5000SF house if two story. And then he wants more ?

You did not say what the insurance estimate amount was - you can reply back using the Answer This Question button right below your question.

I would say you need to not pay him anything more at least till this is all sorted out because he did not perform all the work promised plus may have vastly overbilled, notify your insurance company of what is going on and that you suspect insurance fraud, and then you need an attorney to address the potential fraud and to stop him putting a lien on your property. And this assumes the job was properly done, which is a big question in this type of case too. I would also have the lawyer check with the local police or DA about whether this contractor has been investigated for fraud in your area. Also check the state licensing board to see if he is licensed - oops, sorry, this is Texas we are talking about - no license needed, hence no state regulatory control or enforcement on the trade.

Do NOT give originals to the insurance company - hold onto them at least till your lawyer is in the picture. You could get certified notarized copies made at your bank if the insurance company wants that.

Answered 6 years ago by LCD


Thank you for your response. This has been a very stressful situation for our family. I am a Special Education Teacher not a contractor. Thank the Lord for people like you who take the time to assist people like us. Below I have detailed what has been transpiring since we had storm damage this past April. I appreciate you taking the time to read about my dispute with my contractor.

My wife and I never had made any property claims in the 11 years we have owned our home. So when a hail storm hit North Texas this past spring we asked our neighbor for a reliable contractor. This is were my issue began, trust. We met with the contractor and he seemed nice. He promised he could do the work and give us extras like painting installing a ceiling fan on my patio and we would not come out of pocket.

The adjuster from my insurance co. came out for an inspection. I coordinated with the roofer to be there at the same time. The three of us went over the house. My house has a pergola attached or sitting on my roof. The adjuster said that in order to do the roof you would have to use a hydraulic jack to temporarily lift the rafters (lattice work) off the roof. The adjuster mentioned that if during the lifting process of the lattice work breaks the lattice , you may file a supplemental claim for replacement of the lattice work. (Aprox 175 sq ft of cedar 2x6's and 2x2's) The adjuster sent us his complete estimate and I in turn sent that to my roofer.

My net claim from my insurance co. based on the estimate was; $15,000, total recoverable depreciation was $6000 and my deductable is $4000. So net claim is 21,000 if depreciation is recovered. Replacement cost was $25k That includes roof, gutters, some windows, some paint and work to the rafters of my pergola that had to be lifted off my roof in order to repair the roof.

A week later the roofer met with my wife and me , he said he would take care of everything, In addition he would replace all window screens paint and caulk all my windows, run an eletric line underneath my patio ceiling for a ceiling fan, put set up a sound system for outdoor speakers, replace the rafters on my pergola, (if they could not lift it off my roof,) have a permit on my door to show he is legit and power wash my patio. My wife and I said it sounds great.He never offered nor did we sign any agreement between us that details price, scope of work and payment.

The first day the project began I became a bit concerned when I went home at lunch to see how the work was progressing. When I arrived a city inspector was on my front lawn throwing the roofers off the job because there was no permit. ( First promise broken), The contractor rushed over to the city and got one a couple hours later so the job could continue. Later that day I went to my back patio to find that the roofers sawed off the rafters of my pergola in order to replace the roof. He never attempted the hydraulic jack system that the adjuster detailed. ( 2nd item not followed) A day latter a fence worker showed up to replace the cedar rafters of my pergola. The lattice work orginally was a combination of 2x6's and 2x2's what I got was 2x6's and 2x4's,.

I became a little worried at this point and started to ask my neigbors who were having their roofs done, how much they were paying. What I discovered after consulting with about ten people with similar homes in my that many of these folks were having basically the same amount of work done at nowhere near the cost. It was suggested that I ask my contractor for invoices. I did so, and that is when things started to really trouble me. He was not that forthcoming, so I contacted my insurance company in regards to any supplemental claims the contractor has made on my original claim. They said he filed for a supplemental claim on the removal and replacement of my entire pergola structure, just not the lattice work. Keep in mind that he filed this claim after the work was complete. I asked the insurance companyto send me a copy of what he was claiming. His supplement included removal and replacement of the entire structure to the tune of $10,000. To give you an idea of the magnitude of his false claim, the entire structure when I had it built four years ago was a four day project that included setting three major posts and some engineering for a total cost of $5400. What I got was three fence guys who spent 12 hour replacing my cedar rafters. Clearly not what he sent to my insurance company.

My insurance company went back to my contractor and told him to come up with something better. He produced some handwritten reciept for $4200 dated before the project began. Another bogus invoice.

I became very worried at this point because my contractor seemed to be a little less than transparent. I believe he was "backing in" to my insurance company's estimate with questionable inflated invoices. I wanted to throw him off the job but he had yet to paint, caulk or do my gutters. A day latter they power washed and painted my siding. They never caulked my windows or wood work as promised. They also got overspray (paint) on my shutters and power washed the paint off my front door. The gutters were replaced. At that point, I called the roofer and gave him my first check of $15000 for the work he completed.

He never had any one come by to do the electrical work and install my patio fan and outdoor speakers. I had to spend three days working with friends and spending my own money. My windows and woodwork need caulking and I have to hire somone to paint my shutters and front door.

My roofer is now claiming that "the xactimate estimate from my adjuster is basis for his billing to me, and acts as a contract between the insurance company, he and myself. Therefore, he is owed all the dollars available in my claim." In other words an additional $ 10,000, ( my recvorable depreciation of $6K and $4K deductable) beyond the $15K I already paid him is owed.

I say nonsense! I have spoken with friends in the construction industry in regards to my situation, they say without a contract between he and me, he does not have a leg to stand on.

My question is that if and when my insurance company deems the job complete and sends me the check for the recovorable depreciation of the claim, how do I proceed with my contractor?

Answered 6 years ago by Tdubbs


You originally had my sympathy - now I feel more like you thought you were getting something for nothing on the back of the insurance company, and because my homeowners premium went up 30% this year largely because of fraudulent claims against the company, my sympathy level has dropped quite a bit.

You know the saying that there is no such thing as a free lunch - and I am sure you were thinking pretty much that when he started offering "free" electrical, gutters, window work, screens, etc etc you know the list. He kept stringing you along by promising more "free" things and you fell for it, and of course as soon as you paid him $15,000 (most likely about twice what the roof job was worth) he started to lose interest in finishing the work.

Right now you are in the middle of a mess, and the clock is running so you do not have time to spend learning about contract issues over the web. You need to be talking to an attorney who has experience in homeowner contract dispute and fraud cases, and he needs to get on board with the insurance company lawyers and possibly the local police and district attorney on resolving this. You need to be handling this through an attorney and inform your insurance company ASAP (NOT the adjuster) through your attorney that there appears to be insurance fraud going on and you don't know if the adjuster is in on it or not, because as it stands now knowing the contractor is submitting false claims which the adjuster may or may not know about puts you in a position of potentially being considered an accessory or co-conspirator to insurance fraud ifthe insurance company picks up on this situation, which a claim audit might very well do.

The reason I say that about the adjuster is the pegola statement - if it was not significantly damaged inthe storm but was damaged or destroyed during removal for repairs of the roof, that would generally NOT be covered under your insurance policy - that would come under the contractor's policy. Also, a $20,000 allowance for repair or even replacement is, as you say, probably WAY out of the realm of reason - jacking it up should have been maybe, at most $500-1000 range assuming a normal sized pergola - or it could probably have been disassembled in a few manhours labor and reassembled in a half day or so by 2 men after the roof was done. Therefore, there is a possibility of something going on between the adjuster and the contractor - but let the insurance company hassle that issue out.

If you are not going to have an attorney on board within a couple of days I would go to your insurance agent with a dated notarized letter (they may be ableto notarize it for you) stating your name, number, policy number, claim number, etc - and stating that you are getting an attorney because the contractor is not performing well and that you believe there may be cause to suspect fraud, and requesting a direct administrative contact in the insurance company foryour attorney to deal with - then get a signed and dated receipted-for copy from the insurance agent so you have absolute PROOF you notified them of the fraud possibility onthat date, before it has a chance to potentially come back on you.

I have seen several cases like this in the past where I came into the job after the fact, and the insurance comapny ended up denying the entire claim because the homeowner got talked into a fake markup or kickback or eat-the-deductible scheme with the contractor, which is insurance fraud so the insurance company denied the total cliam and cancelled the policy. Plus it goes in the insurance bureau and credit reporting company records, so those people will probably never get insurance of any kind again in their lives - which can include losing medical and vehicle insurance, so there goes your ability to drive too ! SERIOUS potential consequences.

To other readers, consumer beware - occasionally insurance companies will "take on" the contractor especially in major fire damage or total loss situations, but generally speaking the insurance (and claim) is a contract between you and the insurance company, and the repair is under a contract between you and the contractor regardless of whether the contractor may agree to accept the insurance payment as payment in full (and that would have to be in writing) of his charges. It is very rare for the insurance company to be a party to the repair contract, though since they are footing the bill (indirectly) they might get involved in the inspection and approval process.

Also on dealing with the a lawyer and the insurance company - you may well have cause, unless the insurance company makes this right, to be filing a new claim with the insurance company under fraud protection provisions of your policy related to the contractor issue, so keep that in mind - and bear in mind unreimbursed losses/costs on this exercise, including the lawyer, may be deductible on your taxes depending on your situation.

As I said before - unless you signed something agreeing to the insurance company estimate as a contract with the contractor, it is NOT a contract between the three parties. And because he promises other things (not in writing) even if it were there would be a supplemental verbal amendment to it or a separate verbal contract, depending on exact circumstances - and that is where it gets REALLY sticky, because those were promised "free" items, so there was no compensation for them, so probably not a contract at all for those.

The one saving grace, unless the lawyer figures you were involved in a fraudulent scheme by accepting "Freebies" like those under the claim reimbursement monies, is it is apparent there was no meeting of the minds between the parties as to what was going to be done, so the contractor's claim of there being a contract is weakened some by that.

Unfortunately, this is yet another case of no defined scope of work and no signed contract stipulating the scope of work, schedule, payments, etc. And of not stopping work and kicking the contractor off the job as soon as you realized he was not performing well.

Good luck - I am agraid this is going to be another learning experience - hopefully when it is all done you will post an abbreviated lesson-learned review on AL for others to learn from.

Answered 6 years ago by LCD

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