Contractor Offers 10% "discount" On Insurance Claim. How Does This Work? - General DIY Discussions - DIY Chatroom Home Improvement Forum

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Old 11-04-2011, 10:46 AM   #1
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Contractor offers 10% "discount" on insurance claim. How does this work?

On a burnt apartment building contractor offers to give back 10% of whatever the insurance company pays out to fix it up. Is this typical? would he use a 1099? or would the owner of the complex just keep 10% of whatever insurance give him. It is a pretty high dollar claim.
And would this "discount" be legal?
Thanks in advance!


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Old 11-04-2011, 10:49 AM   #2
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In most states that would be illegal.


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Old 11-04-2011, 01:21 PM   #3
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My guess is that proposition is nothing more than a ploy to get the work. Then during his performance it would be easy enough to set-off that promise with extras that would come up throughout the job. The insurance company may also cover extras to a point but in doing so it would void any rebate promised.
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Old 11-04-2011, 02:48 PM   #4
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In more common terms, it's called a kickback.

That is not a contractor you want to deal telling what else he would use sub-standard material....stolen material.....the list goes on.

You see....the moment you agree to take the kickback....he now has you by the private parts....he can screw you around and your going to be afraid to complain because if you do...the insurance company finds out and your left high and dry....and the contractor? He just changes the name of the company and moves on to the next sucker.
Even if you are on the right track, you will still get run over if you just sit there.

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