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Discussion Starter · #1 ·
I have completed a roofing project that is associated with an insurance claim. I charged the customer in accordance with their insurance scope of labor. The total job cost is approximately $8300. We completed the work and the customer has paid in full for the work performed. I sent the insurance company the invoice I gave the customer. The insurance company owes the customer $885 for the depreciation on the roof. The insurance company has declined to pay or release the depreciation for the work completed. Their explanation is that the ACV payment or first check was in the amount of $7181.65. The customers deductible is $1690. The total of the two is more than the invoiced bill from our company. Their words to me are "technically sir we have already over paid". That is simply not true. The insured is entitled to the acv amount of their claim whether they do all of the work or not. We are planning on doing all of the work on the job in a timely manner, but the customer simply isn't ready to do their interior work at this time. The insurance company is holding the money that customer should have to begin the next project. The customer is frustrated with me. As I understand I told them their insurance company would pay them the the depreciation money on the roof work when we completed it.
I have many friends in the same business of working with insurance related claims. They tell me that this is my fault. I should be invoicing the insurance company for the entire job being completed. That the insured is entitled to all of the money for the insurance work. That I am doing them an injustice for not invoicing the insurance companies for the total job. I agree that the customer should get all of the money from the insurance company, but why am I supposed to commit insurance fraud in order to help them get all of their money. I am an honest person, who owns an honest business, that does honest work, and does so legally. It seems that they are right in some ways. I dont know any contractors that are in jail for invoicing for work complete on work that they didnt do. Why am I being punished for being honest? they should be thanking me for invoicing honestly. What can I do to get the insurance to do as they should do legally. They are going to cost me referrals and future projects with this customer.
 

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Who hired you to do the work, the homeowner or the insurance company? It sounds like you are trying to play middleman between the two, between a rock and a hard place. The homeowner is already blaming you for what you told him they would do. I sure wouldn't go any deeper without a clear understand of who is paying the bill to you and for how much.
 

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I am also in the insurance restoration industry and feel your pain. But to be honest, it is your fault. Take it in the chin and change the wording in your contract. Mine states that our contract agreement will be for the full amount aloted by the insurance company including any recoverable depreciation.
 

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I would have to look at the detailed claim to see exactly what happened, but are you saying they haven't paid in full because there is interior work that hasn't been completed that is part of the claim?
 

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And by the way, phone conversations mean absolutely nothing. Always correspond through email. That way, if they are cheating the customer, or breaker the law, it's all documented.
 

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Discussion Starter · #8 ·
Yes there is interior work. I completed the roof work. There are $885 dollars in depreciation being with held for the roof portion. What they are doing is re arranging the numbers. Saying well we paid the customer $7181 up front and the deductible is $1690 which is more than the remaining amount of your invoice. They are ignoring the fact that once any work is complete the withheld depreciation on that work must be released.
 

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I'll assume that you do. So email whoever you've been dealing with, and ask them to reply in detail as to why they aren't releasing the depreciation on the roof. You can then use that reply as leverage.

I'm trying to understand the actual breakdown of the claim, but they do indeed have to release the depreciation if the roof is finished. If it comes down to it, call the texas insurance commission, explain what they are doing, and send them the correspondence. They will contact the insurance company. That depreciation will be released very fast. At least that has been my experience. Also, I'm assuming you're in texas from your name.
 

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The final payout from insurance will be based on your invoice, not their original adjustment. If you charged less than insurance was paying (can't be sure but it kind of sounds like it) then insurance will only pay what you invoiced, less the owners deductible.
 

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I’m not quite clear on the math that was outlined. Please clarify if I misunderstood:

$8,300 is the Replacement Cost estimate for all work (both roof and interior work).
$7,181.65 is the ACV estimate for all work (both roof and interior work). Approx. 15% depreciation. Insured has already received payment in this amount.

You have submitted an invoice for the roof work only. No amount given for the Replacement Cost of roof only, but if $885 is the estimated roof depreciation, and depreciation is 15%, then I assume the roof was approx. $6,000 Repl. Cost. That leaves $2,300 Repl. Cost for the remaining interior work.

Roof has been repaired, so Insured is entitled to full Repl. Cost = $6,000.00
Interior work not yet done, so they are entitled to $2,300 less 15% depreciation = $1,955 ACV
Their deductible is $1,690.
At this point in time, they are only entitled to $6,265. But they already received $7,181.65. So it seems like the adjuster is correct in stating that no supplementary payments at this point in time. Please clarify the math if otherwise.

Not to rub salt in the wound because you are already frustrated with the situation, but contractors need to be very careful in how much “help” they provide to the homeowners re dealing with insurance companies. You can help expedite claims settlement by discussing anything related to the work required and the costs to be charged, plus sending invoices direct to the insurer. You can’t counsel the homeowner re how the insurance company will pay. If you start interpreting the way the insurance policy is worded with respect to how a claim will be settled and paid, you are on a slippery slope as holding yourself out to being an insurance advisor (i.e. insurance broker, agent, adjuster) and you need to be licensed to act in this capacity of interpreting policy wordings and giving out insurance advice to the public.
 
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