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Contractors - Insurance Fraud

4K views 16 replies 9 participants last post by  cpa54130 
#1 ·
I have a question, after the last hail storm, a local general contractor approached me for repairs. I was promised no out of pocket expenses and the contractor would bring my home back to pre storm condition for "insurance proceeds plus supplements + overhead & profit". Well, I put a third down and paid the balance off even though the contractor invoice was higher than the insurance paperwork. The contractor added expenses to the bill that I was not aware of. I ended up paying the bill. THEN, the workers who did the work came to my house to tell me that the contractor did not pay them and they were putting a lien against my house because of it! Isn't this illegal? Does anyone have any input on how I can get this situation rectified? I paid my bill and now I have a contractor lien on my house!
 
#4 ·
It may not be illegal
You needed to receive a sign-off from each contractor/sub-contractor that did work on the house

It could also be a scam
I'd report him to the local police

You agreed to no out of pocket expenses
But then you agreed to

"insurance proceeds plus supplements + overhead & profit"
That indicates out of pocket expenses
Which is it?
 
#5 ·
as it was explained to me by the contractor: they took all monies that the insurance company allocated for my repairs (including work that they did not do) and any additional money they submitted to and got from the insurance company. That's why the invoice was more than my initial insurance paperwork
 
#7 ·
The contractor nor anyone from the contractor's office is returning my calls. I've left messages with the owner, the cfo, the general manager and with the local sales manager. The subcontractor told me that he has not been paid for several jobs and that this contractor owes him in excess of $96,000. I feel bad for the guy as he did a great job ....but this just wrong in so many ways and I don't know what kind of action I can take for my property
 
#11 ·
On the contractual monies, you may be out of luck. However as far as the liens are concerned, although ultimately you are where the buck finally stops in financial satisfaction of all outstanding debts connected with your project, the contractor may be held in violation for not submitting waivers of lien to you.

Here in Florida (you did not state your own location) I am required to acquire waivers of lien from all subcontractors and suppliers, AND give a copy to the homeowner. To fail to do so is to put my license at risk, and open myself up for disciplinary action by the Licensing Board. To wit: Fines, suspension and/or revocation of license.

The police won't do much because this is not really their kind of problem. Your state professional licensing board are the ones that will yank his chain... hard.
 
#14 ·
Would my insurance company want to know about this? These monies came from my insurance company and this contractor sent a certificate of completion to the insurance company.
I'd absolutely tell them ASAP. Just make sure that you get all your facts, information & any documentation.

Also, get a written and signed letter with owed-totals from the Contractor that is making the claims.
 
#16 ·
WOW! Sorry to hear that? Where are you located? Our whole neighborhood has been/is being redone by a local contractor who is cashing in on hail damage. I never even thought about what would happen if he wasnt paying his subs. Does that actually become the home owners problem? My house was completed about 2 weeks ago. My contractor has been paid all but the last portion of the insurance money. My whole ordeal went much smoother. We had them do the roof as well, and they did an excellent job. I would hate for the subs not to have been paid.
 
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