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i got my roof redone recently and insurance paid 22k and it only cost 18k to replace .my name was on check with the roofing company ,so i signed it and gave the check to the roofing company. i have not received a dime of what was over paid by insurance. it has been 3 weeks since i gave them the checks. i have tried contacting them and was told i won't be getting any of what was left .what should i do? do they have any rights to that money?

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  • So the insurance company issued you a check in your name, you endorsed it and gave it to the roofing company? Did they give you an invoice for the $18k? – D Stanley Apr 8 at 18:58
  • my name and the roofing companies name was on it.i was told to sign it and give it to the roofing company to cash. and yes i have an invoice for the 18k – angela Apr 8 at 18:58
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    Did you inquire with your insurance company? I wouldn't expect you to get the excess, it would go back to the insurance company if they overpaid since they were covering the actual cost. – Hart CO Apr 8 at 19:24
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    i know several people who have had insurance claims made out to them and the contractor and they were refunded the money that was extra.they were free to do w/e they want with it. what is alarming to me is i have no explanation of what is being done with the extra 4k – angela Apr 8 at 19:38
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    it is very odd to say the least. if insurance were to call and say "hey we see we overpaid 4k can we have it back" then i would have to pay out of my own pocket .none of it makes sense at all .we wrote the owner of the roofing company earlier this week.so he better give an explanation of what is going on – angela Apr 8 at 20:06
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It's not entirely clear whether the extra $4K belongs to you, or your insurance company. One thing is pretty clear though: the $4K does not belong to the roofing contractor. The contractor, having given you an invoice for $18K and receiving a check for $22K knows this without a doubt, and IMHO this constitutes nothing less than an attempt to steal from you.

Is there any scenario where the roofing contractor should be allowed to keep the $4K? There are some contrived scenarios, but based on your description I don't think either of these happened:

  1. If the original estimate from the insurance company was $18K, and the roofing company told them it's going to cost $22K instead, and then the insurance increased the estimate to $22K, then the full $22K would belong to the roofing company. But if this is what happened, then the quote they gave you would have said $22K, instead of $18K.
  2. If while repairing the roof for the agreed upon $18K, the contractor found additional work to be done, they repaired it, and increased their price to be $22K, and you agreed to it, then they would be entitled to the full amount.

Based on your description, it sounds like had you written them a check for $18K they would have happily accepted it. All signs point to them trying to take advantage of you simply because you let them deposit the check.

What should have happened: In retrospect, the roofing contractor should not have been the one depositing the check. They should have endorsed it and you should have deposited it, and then when the check cleared you would pay out the contractor. (I had a recent claim where my checks also contained the name of my mortgage company, so I mailed them the check, they signed and mailed it back to me.) Obviously that doesn't help you know though...but let's let this be a lesson for future readers.

Who does the $4K belong to? With my claim last year I specifically asked my insurance company (StateFarm) what would happen if my repairs are less than the estimate, and/or if I decided to do some of the work myself. The answer I received was that I get to keep the difference, and I did. I don't want to say with certainty that you would get to keep the difference in your case also, but given my experience with one company and one claim, it's definitely possible.

What can you do? I recommend two things, but I won't specify which order to do them in:

  • Contact your insurance company and ask them the same question I did: "What happens if it costs less to repair the damage than the amount of the estimate, or if I did some of the work myself? Do I keep the difference?" If the answer is yes, then I would explain your situation and ask them what they recommend you do for retrieving the rest of the money from the roofing contractor.
  • Contact the roofing contractor again. Remind them that the cost of the work was $18K, and you let them deposit the check, and they owe you difference. You can ask them why they are now charging you $22K now when you agreed upon $18K? Next you can word this however you'd like depending on how the conversation is going, but basically you need to imply that you're willing to involve the insurance company, or an attorney, or even the police. The contractor knows they are wronging you, and my gut feeling is they will cave pretty quickly as soon as you put up a fight.

Additional thought: It's possible that by involving the insurance company, if you're not entitled to keep the money, your actions would accomplish nothing more than the excess money getting returned to the insurance company. But even if you know that's what will happen, I would absolutely still do it! Out of spite, I wouldn't want the contractor to get away with this, but more importantly, your future insurance rates are partially based on how large your claims are. A smaller total payout could lessen how much your premium increases in the future.

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  • thank you so much! i was starting to lose my mind .i kinda felt they they were in a sense accusing us of fraud for wanting the extra money back. when we told them that their name was on the check they said it would be fraud if we had them sign and send it back to us to deposit.they said if they got audited they could get into a lot of trouble.so we trusted their word and it infuriates me now. they completely took advantage :( – angela Apr 9 at 2:18
  • @angela Interesting. What was the original claim amount (maybe $23K, and then minus your deductible of perhaps $1K you received $22K)? Did the contractor know the original claim amount when they agreed to do the work for $18K? And how did the conversation go when you asked them to endorse the check, was it something like: "I got the insurance check but it has your name on it too. It's for more than I owe you, so would you please endorse it and give the check back so I can deposit it and pay you?" And they said, "No. That would be fraud. You endorse it and send it to us." (But then what?) – TTT Apr 9 at 2:56
  • @angela - the fact that they accused you of fraud when you asked to deposit the check is throwing me for a loop. Based on your comment I'm starting to wonder if my scenario #1 is what happened, except that they didn't tell you they had the estimate updated after they quoted you $18K. In that case, I'm afraid you're probably out of luck. In my case, the insurance estimate came first, and then I went and found a contractor. So which came first in your case, the insurance estimate or the contractor quote? – TTT Apr 9 at 3:30
  • we got 2 checks from the insurance first was 12,900 and they deducted 1k for deductible. so 11,900 was sent .their guy who handles insurance claims then supplemented more to do it .which came out to 18k,but the insurance sent another check of 10,100. we told them that their name was on it,so we asked if we should send it for for them to sign and then have it sent back for us to cash. i told my husband we should do it that way and they stated it would be fraud and they could get into trouble if they got audited. we have an invoice for 18k,says 18k on the permit – angela Apr 9 at 13:47
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    i believe insurance paid out what they thought it would cost and then he contacted them asking for more.i am calling insurance in a few to ask for the final quote they received and will ask what happens if there is money left over – angela Apr 9 at 15:37

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