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Question DetailsAsked on 4/16/2016

Hailstorm damage: A roofer says not to show his estimate to the insurance company? Should I be worried?

Our home was damaged in recent Texas hailstorms. The roof (shingles, underlayment), gutters and a few other items were a total loss. Our insurance company is paying all but $5,400, our deductible. A roofer (listed on Angies List, good BBB listing, solid warranty performance as far as I can tell) has offered to repair the damages UNDER the cost of the deductible so that we will have no money out.

But, the roofer said I should not show his quote to our insurance company. Why? When people say, Don't show or repeat this to someone, I worry because I try to act honestly.

Can someone give me some insight on this?

Thanks in advance,


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1 Answer


Depends on how the payment was done - generally, if it was a "cash out" or cash settlement based on their estimation of the damages without bids (typically about 70-80% of what it will actually cost to repair on their initial offer) which you accepted, then you are generally not required to use it all for the repair if you can get it cheaper. (The fact initially adjusted amount are usually low by 20% or more is why they send you a check, depositing of which constitutes your acceptance of the adjusted amount in full). IF you refuse to accept the offerred amount you can go back to them for more if jsutified by the bids.

But if you fail to repair it then they can reduce the value of the house by that respective amount in the future if you have a claim that includes the roof. Your mortgage company is likely to be pretty upset too if you don't get it repaired, to protect their loan collateral. Also, if it needs the repair to prevent future damage (like water damage) if you do not repair it in a reasonable amount of time they can deny those future damages as being caused by your gross negligence. Obviously, not repairing the roof adequately involves a lot of risk.

If instead the payment was an initial payment subject to verification and possible adjustment depending on what was found in the tearoff, then they will be expecting a receipt to verify the cost - either before they finalize the claim or possibly in audit mode.

Since the contractor said what he did, I suspect the latter - because it sounds like he is trying to make it so you pay no deductible but make the insurance company pay the full amount of the loss including deductible. For instance, if the total damage was "adjusted" by the insurer at $15,400 (let's assuming you have replacement cost insurance to avoid the complexities of amortization due to age) that would mean they would cut a check for $10,000 and you would pay $5400 deductible. Any actual total cost less than that would mean that you would not actually be paying the full deductible as your insurance contract stipulates. For instance, say the final bill is $9900. Less the $5400 deductible you should have paid, that means the insurer should have paid $4500 - so you are coming out "ahead" of them by $5500 by paying no deductible plus gettring $100 from the $10,000 claim check, and the insurer paid $5500 more than he should have. In pretty much all states the insurer would ask for proof of actual cost and be entitled to a refund for the overage. In most states failing to pay the full deductible in the contract would be both contract fraud (civil) and insurance fraud and filing a false claim (criminal acts).

I strongly suspect somewhere in the fine print of your contract or more likley the claims paperwork (which you should have gotten a copy of) there is an explanatory sheet on this subject, and on what to do if the final cost is more or less than estimated by adjuster.

Assuming you are intending to repair the roof and gutters and such back to essentially equivalent condition to original, I would call and tell the insurance company you are getting bids, and ask the insurance company agent about what happens if the bids all come in higher than their payment - i.e. can you go back for more coverage; and if bids come in less than what they paid are you expected to repay the difference or not. And DOCUMENT what is said - probably best to do by eMail so you have a written record.

Obviously asking the insurance company is asking them to say they don't want excess money back - not likley to happen - but your other alternative is to ask an attorney, or maybe (if you trust their answer) a Texas consumer protection agency or district attorney's office.

One other thing - you said he is offering to do the job for under the amount of your deductible - if he is saying say $5300, that means your insurance company would pay nothing - your $5400 deductible would coer it all, so be sure he is not pulling a fast one on you. Especially if you signed something assigning the insurance proceeds to him (a BADDD idea because his possible fraud becomes your problem because he is acting as your agent). It might be he did not want you showing them the bid because he is intending to actually bill them for way more than the amount he told you, then accept the $5400 reduction for the deductible (so you don't see you are paying it) and keep the rest. That would be out and out insurance fraud.

Answered 4 years ago by LCD

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