Insurance Fraud?

 
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Old 04-16-2009, 07:35 AM   #1
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Insurance Fraud?


Legitimate contractor here, frustrated with competition paying homeowner's deductibles. Integrity seems to have gone to the way side with these guys!

My question is this. Is paying a homeowner's deductible actually insurance fraud? Because, the definition of insurance fraud does not read that way. Insurance fraud is falsified documents to increase the amount of a claim, right? Or, false damage to file a claim.

Is it true you can pay a homeowner a fee to place a sign in their yard for the amount of their deductible and be legit?

Can anyone tell me if it's truly fraud, or is it time to adapt or die?
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Old 04-16-2009, 08:13 AM   #2
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Re: Insurance Fraud?


In my view you are talking about to related but separate incidents.

First a HO claims a loss, the insurance co. settles and cuts a check. Second the HO hires a contractor to do the repairs. My experience has been that the dollar amounts for these separate incidents seldom match exactly. Once the ins. co. cuts that check it is no concern of theirs how much it costs to actually do the repair. The estimated damage - the deductible = the check paid to HO.

I have read about offering discounts for the right to put a yard sign on the job. That would most likely be a closing technique reflecting the fact that the salesman failed at some point and now must buy the customer with a discount. Companies using yard signs will use them unless specifically requested to not do so.

So plan ahead, add their deductible to your job cost, cover the clients deductible (discount the contract) in exchange for putting your yard sign out. You both get nothing for nothing.

It's only fraud if the HO and contractor work together to artificially inflate the settlement.

Good Luck
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Old 04-16-2009, 09:14 AM   #3
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Re: Insurance Fraud?


Jay-walking is illegal, but not enforced. Same for people waving deductibles. I have never seen it enforced or prosecution of any kind in my 14 years in this business.

Especially in the recession we are in, people are squeezing as much as possible. If you are in a storm environment, saturated with stormers, good luck getting deductibles, because that is their way of getting jobs.

And yes, you may have to do the same in order to get certain jobs or lose them completely.

Last edited by Travis; 04-16-2009 at 09:18 AM.
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Old 04-16-2009, 09:35 AM   #4
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Re: Insurance Fraud?


First, insurance don't care. They already take a large pool$ of money from ALL people and pay back to someone else as normal acceptable ways or daily business expenses/risks, & the rest, healthy accounts are still their profits. That's a concept of insurance business.

Second, insurance businesses are competition & collecting as many monthly dues as possible to generate revenues. If they don't reimburse $$ based on fraud investigations, people WILL leave them for other insurance companies/competitors, they will loose more monthly accounts, & that is not a good business model to stay in healthy.

So, they pay up now or pay later ===>> & Customer (HO) Satisfaction Guaranteed.. is their Insurance Business Policy!
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Old 04-16-2009, 03:07 PM   #5
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Re: Insurance Fraud?


Dmont, im sorry about your frustration. I am a contractor who absorbs the H.O's deductable. But the way I see it, is we are doing them a favor. If a storm comes through and damages there home, and they hire us to do the work, but they have a $1000 deductable, with times like this, alot of people would not want, or have $1000 to pay the ins. company, so we take it right off of our proffit. And depending on how much there deductable is, we dont alsways get to absorb the whole thing, but we try to help as much as we can. I guess thats my opinion, thats like if you got into an accident with your car, and you take it to the body shop, and you find out there is $7500 worth of damage, and the owner of the body shop saying, "I know you have a $500 deductable, but down worry about it, ill take care of it for you, and you can pick your car up in a few days." I hope this makes sense.
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Old 04-16-2009, 04:01 PM   #6
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Re: Insurance Fraud?


Covering deductibles is against the law. There are new statutes for it.

Although, there are too many pop up companies out there working out of their van who can do these jobs very cheap. They don't have a real business, so they have no overhead. Most of them hire people as illegal subs or use illegal aliens to do the work.

All of these are not legal business tactics, but they are NOT enforced.

So, the question is.......do you just join the crowd who is stealing your work, or not????

As for most homeowners, they are not educated enough to make good decisions. They get a number off a ditch sign or go down the list in the yellow pages. Those kind of people do not care what they get for quality. They really have no idea. This is where the hacks make all their money. They just want it done and done NOW or earlier.

Personally I'm really tired of it. Laws are not enforced, and it just punishes the honest person. Business just isn't fun anymore.
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Old 04-16-2009, 08:58 PM   #7
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Re: Insurance Fraud?


MJW, can you please explain more on these laws? Im not trying to sound naive, but I am new to the business, and the company I work for is not a pop up company, they have been a local company for over 20 years, and do not hire illegals to do the work. They do quality work, and do it the right way. But I am told that absorbing the homeowners deductable is a good selling point. So I would like to know the right way of doing things...
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Old 04-16-2009, 09:19 PM   #8
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Re: Insurance Fraud?


Quote:
Originally Posted by 10klakes View Post
MJW, can you please explain more on these laws? Im not trying to sound naive, but I am new to the business, and the company I work for is not a pop up company, they have been a local company for over 20 years, and do not hire illegals to do the work. They do quality work, and do it the right way. But I am told that absorbing the homeowners deductable is a good selling point. So I would like to know the right way of doing things...
Why does your company have 2 businesses, Glick and Gunner?

Ed
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Old 04-16-2009, 09:22 PM   #9
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Re: Insurance Fraud?


Gunner? I do not know what Gunner is? Were does it say this?
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Old 04-16-2009, 09:51 PM   #10
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Re: Insurance Fraud?


Quote:
Originally Posted by 10klakes View Post
Gunner? I do not know what Gunner is? Were does it say this?
http://www.gunner-construction.com/



Read the very fine print words, "roofing service" on the
Links Page of http://glick-construction.com/links.html

Same owners, right?

Ed
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Old 04-16-2009, 10:14 PM   #11
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Re: Insurance Fraud?


Quote:
Originally Posted by Ed the Roofer View Post
http://www.gunner-construction.com/



Read the very fine print words, "roofing service" on the
Links Page of http://glick-construction.com/links.html

Same owners, right?

Ed

Ed does detective work on the side, not much gets by this kid
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Old 04-16-2009, 10:23 PM   #12
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Re: Insurance Fraud?


I'll just say that knowingly covering deductibles is not legal, but I'll also say that there is no one to enforce these laws.

10Klakes, did you hear the latest scam in your area........about the Certainteed lawsuit in some flyers???????
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Old 04-16-2009, 10:28 PM   #13
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Re: Insurance Fraud?


Quote:
Originally Posted by Ed the Roofer View Post
http://www.gunner-construction.com/



Read the very fine print words, "roofing service" on the
Links Page of http://glick-construction.com/links.html

Same owners, right?

Ed

Nice pictures!
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Old 04-16-2009, 10:41 PM   #14
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Re: Insurance Fraud?


I wonder how much the website developer got for creating those custom websites?

(To the roofing contractor, I am NOT making fun of your sites)

They look okay, don't get me wrong, especially for a consumer looking up things on the web, they serve their purpose just fine, except for the Glick site being extremely slow from clicking on the tabbed pages.

My point is specifically about the website developer.

Can't anyone just use Yahoo Site Builder for FREE Too?

Website Design by Beaumont Consulting, Inc. (proudly created using Yahoo Free Site Builder)

"Websites should be more than an electronic list of information and pictures. The best websites reflect the attitude, culture, integrity, and personality of the business or people represented. At Beaumont Consulting, we believe websites to be a reflection of our clients. We design websites that appeal to target customers or audiences, establish credibility, and increase visibility. Beaumont Consulting will tailor your website to be a strategic advantage of your business."


So, ask you bosses how much they paid for a site, that was built with a WYSIWYG point, click, drag and drop Free Site Builder?

Ed
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Old 04-16-2009, 10:46 PM   #15
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Re: Insurance Fraud?


Quote:
Originally Posted by 10klakes View Post
MJW, can you please explain more on these laws? Im not trying to sound naive, but I am new to the business, and the company I work for is not a pop up company, they have been a local company for over 20 years, and do not hire illegals to do the work. They do quality work, and do it the right way. But I am told that absorbing the homeowners deductable is a good selling point. So I would like to know the right way of doing things...
By the way, welcome to the site and please make sure you don't take my comments personally. I am really glad to have another roofing contractor or salesman on this forum site.

It really is a great forum to learn a lot of new and old things.

So, please go introduce youself, so we know who we are talking to.

There are quite a few Mn roofing Contractors already members on this forum.

Just make sure your bosses did not pay for a custom creation, thats all. Roofers get screwed enough, as it is.

Ed
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Old 04-16-2009, 11:13 PM   #16
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Re: Insurance Fraud?


Quote:
Originally Posted by MJW View Post
Nice pictures!
By the way MJW, have you changed your mind about me being a white collared office worker yet?

Want to take a trip down memory lane?

http://www.contractortalk.com/f15/qu...epaired-16147/

You are alright bud. I just thought you might get a kick out of that thread.

Ed
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Old 04-16-2009, 11:13 PM   #17
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Re: Insurance Fraud?


MJW, I do not know about the cirtainteed lawsuit, and I would love to learn more about it.

And Ed, no offense taken. I do know the owner of my company has as brother in the industry, so that could be him running Gunner, but I dont want to be stating information that is not true. I do however, find it kind of weird that the sites are so similar. Thanks for the spy work. I guess I still have alot to learn Oh, also Ed, I did introduce myself in the introductions section under "New guy from MN"
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Old 04-17-2009, 07:00 AM   #18
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Re: Insurance Fraud?


The scam is a bunch of flyers given out to homeowners with shingles that were believed to be a certain age. The Certainteed lawsuit is mainly for their Horizon line, but anyways......This company used this to get their greasy foot in the door. They would come in and say that the claim cannot be filed unless you 'sign this'.......We must check with your insurance company first to rule out any storm damage.

LOL

Welcome to the site 10klakes........believe it or not there are some here that you can learn from.

Ed, you are still a lawyer boy!
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Old 04-18-2009, 11:52 AM   #19
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Re: Insurance Fraud?


I guess I will go ahead and let my voice be heard on this one. First off, we will NOT cover a deductible amount on any type of claim that we are acting as the insured's pre-contracted contractor.....you cannot do that and legally work the claim.

In an RCV (replacement cost value) policy, the insurance company will generally pay the claim in two seperate payments. The first payment is the ACV (actual cash value) of the claim less the deductible amount. Also known as the depreciated value. The remaining funds, or recoverable depreciation, are billed to the insurance company by our company with a copy of our contract, a certificate of completion signed by the insured, and an invoice/statement showing the total contract amount less all previous payments which leaves us with the recoverable amounts.

By asking if 'covering deductibles' is against the law, I really cannot answer that questions directly because it does not have enough information. In my above example, let's assume the claim is set up as follows:

Total RCV: $10,000.00
Depreciation: < 3,000.00>
Deductible: < 1,500.00>

Total ACV Pmt $ 5,500.00 first check from insurance company

Here's where a lot of contractors break the law. If you do the roof for the insurance settlement of $10,000.00 but tell the HO you'll cover their deductible amount and actually contract for $8,500.00, you break the law when you send the 'doctored' invoices to the insurance company stating that you need the $3,000.00 back in recoverable monies. The insurance company has stated that they will pay UP TO $10,000.00 on the roof replacement including the HO deductible amount. You did the roof for $8,500.00 so technically, the insurance company should only release the difference of $8,500.00 less $1,500 deductible, less ACV payment of $5,500 which would give you a final payment of $1,500.

Here's how contractors get away with it. They have the HO sign a contract for the full $10,000 amount and then immediately get a change order reduction form signed for the deductible amount for 'advertising lease space' of where their sign sits in the HO lawn. Technically, this is legal, but I believe it to be unsrupulious. Legally, once the $10,000 becomes the property of the contractor (even on paper) he, as a businessman can do with it what he wants.

The last scenerio would be that you ask what their settlement is, hear it is $10,000, hear they have a $1,500 deductible and you tell them you'll do the roof for $8,500 by covering their deductible. As long as you don't deal with the insurance documents and the HO pays you the $8,500 and you go on your way, this is not illegal in the least. The HO will be the one breaking the law when he sends in the fake documents to the insurance company to show he spent the $10,000, which he didn't do. Although not illegal, I believe this scenerior to be stupid. You are taking a job knowing you are $1,500 in the hole before you start. Bad business.

The solution....be a better salesman. I tell my clients up front I do not and will not cover their deductible. I explain to them that any roofer that does is committing insurance fraud and they are partied to it if they assist in it. I let them know that their roof is not worth going to jail over. I make the other guys look like crooks (which they are) and enforce the fact that we do business one way...the right way. Even at the risk of not doing their work.

For those of you who say the ins companies don't care...move to TX. Almost every adjsuter I meet with at some point and time during the inspection we get to talking on friendly level and have had this conversation many times. They are looking and will prosecute you down here if they find out. Large fines up to time in the pokey. If you do business the right way, you never have to look over your shoulder.
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Old 04-18-2009, 03:29 PM   #20
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Re: Insurance Fraud?


The solution....be a better salesman. I tell my clients up front I do not and will not cover their deductible. I explain to them that any roofer that does is committing insurance fraud and they are partied to it if they assist in it. I let them know that their roof is not worth going to jail over. I make the other guys look like crooks (which they are) and enforce the fact that we do business one way...the right way. Even at the risk of not doing their work.

[/quote]


I have absorded deductibles in legal ways. I Am no crook.

So if anyone else on this forum has eaten a deductible before, are they a crook?

How screwed up is Texas? They will prosecute a honest man for helping out people here and there in a deep recession over a measley $500.00 , but Gosh Damn, they sure just don't seem to prosecute the illegal immigrants crossing the borders daily illegally.


Last edited by Travis; 04-18-2009 at 03:45 PM.
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