Say what you want on the net, bottom line is no one can do anything, except maybe get a refund for the felt.
As for the insurance, they can make up any rule or stipulation they want. If they insure it, they cover it. It is their responsibility to know what they are insuring. If they do find out, they possibly wouldn't pay for new felt.
As far as lying and cheating, its seems to me that the crooked contractor was up front and honest about the whole thing.
Be honest with yourself....really, what are you going to do? Start a fist fight? Possibly end up in jail? LOL, Come on.