Even though she is only a tropical storm, the people of Louisiana are no strangers to flooding and hurricane-type weather! Grand Isle Mayor David Camardelle is not taking any chances and has called for voluntary evacuations. As of Thursday evening these are still voluntary. But if the storm intensifies the mayor may issue a mandatory evacuation.
New Orleans is not calling for any evacuations at this time, but is heavily monitoring the situation.
Tropical Storm Karen is headed towards the southeastern tip of Louisiana and the southern coasts of Mississippi and Alabama. The western tip of Florida may also be affected. Stay tuned to The Weather Channel for up-to-date coverage on the storm! Below you will find an image from The Weather Channel of Tropical Storm Karen's projected path.
Thursday, October 3, 2013
Tuesday, October 1, 2013
Eating a deductible is breaking the law! Do you need help finding a reputable contractor?
While some of us have been busy filling our down time from a deployment by playing Grand Theft Auto V online, watching the Breaking Bad Finale or being irritated by all of the media surrounding the Government Shutdown... Lets focus on a ethical hot topic that will have many contractors screaming in protest! Ignoring deductibles! This is a serious issue that could land the homeowner and contractor in jail and with some hefty DOI fines! (Department of Insurance) As an adjuster, it is important to be aware of this moral dilemma; because roughly 85% of all contractors are going to do this! (that's almost 9 out of 10 contractors)
By law, insureds are required to fiscally participate in a loss with the insurance company. This is why there are deductibles; and this is why everyone is required to pay a deductible to the insurance company whenever a loss is suffered.
"Eating a deductible" means that a contractor will attempt to negotiate with your insurance company so you do not have to pay your deductible on your claim. Your contractor may make this sound like a good deal; but the problem with this is that "eating a deductible" is classified as insurance fraud. In order for a contractor to do this, they would need to either: screw you over when you try to claim your RCBs (recoverable depreciation) or double invoice your insurance company. Double invoicing means that they will give the insured (you) an invoice for "xxx" dollar amount, while submitting a different invoice to the insurance company for a higher dollar amount. This higher dollar amount will conveniently be in the amount of your specific deductible. In other terms, your contractor is purposely lying to the insurance company! Once you (the insured/homeowner) have been made aware that your contractor is doing this, then you can be held liable as well!
This is the current Indiana insurance law which will hold true and be consistent with most states. Visit your local government facility to obtain the exact insurance law in your area.
INDIANA CODE 35-43-5-4.5
A person who knowingly and with intent to defraud:
(1) makes, utters, presents or causes to be presented to an insurer or insurance claimant, a claim statement that contains, false, incomplete, or misleading information concerning the claim.
(2) presents, causes to be presented, or prepares with knowledge or belief that it will be presented to or by an insurer, an oral, a written, or an electronic statement that the person knows to contain materially false information.
There ya' have it.... That is insurance fraud! Not a whole lot of room for grey area is there? If you and/or your contractor are found guilty of this, then you will have performed a Class C Felony! Once you commit a felony, you can no longer vote or purchase/carry a firearm. You will also face jail time and hefty penalties.
Now the question is... "Is my contractor doing this?" Unfortunately the answer is most likely, "Yes!" Most contractors are unaware that eating a deductible is insurance fraud; therefore most are going to openly advertise that they will do the job so you don't have to pay for your deductible... The competition is fierce out there! Especially after a new storm hits! Almost all contracting companies are going to feel inclined to offer "eating a deductible" to you because otherwise they don't feel like they can compete in the market. They can be a little sneaky with how they present this to you. They may also try to pressure you! You may have heard this before:
There are other problems that can also arise from "eating deductibles." Unless you live in a state that is RCV only (i.e. West Virginia) your insurance company is only going to give you a portion of your settlement up front. This is called Actual Cash Value or ACV. Without going into huge details, ACV payments are best described as "ransom money!" The insurance company doesn't want to overpay for your claim so they want to make sure you are going to actually do the work for the amount that has been settled/agreed upon. Your insurance company is going to ask for a contract or invoice from your contractor. They basically want to make sure you are legally contracted to complete the work before they release the rest of your settlement to you. If the insurance company receives an invoice from your contractor that is "xxx" less than the total claim settlement amount (assuming your contractor is not double invoicing and submits the invoice amount that he/she is actually charging you), then the insurance company is only going to pay you the costs you have incurred, less your deductible. In other words, you are getting a crappier roof than you deserve because you will still end up paying for your deductible!
I can guarantee you if your contractor is willing to cheat your insurance company, then they are going to cheat you too! It may come in the form of your deductible, but your contractor is going to "cut corners" elsewhere so they can still make some sort of profit on your job. You will get a lesser quality roof if you go with a contractor who is doing the job for your deductible!
"IF YOU ARE A CONTRACTOR WHO IS KNOWINGLY DOING THIS TO YOUR CUSTOMERS..... SHAME ON YOU!"
By law, insureds are required to fiscally participate in a loss with the insurance company. This is why there are deductibles; and this is why everyone is required to pay a deductible to the insurance company whenever a loss is suffered.
"Eating a deductible" means that a contractor will attempt to negotiate with your insurance company so you do not have to pay your deductible on your claim. Your contractor may make this sound like a good deal; but the problem with this is that "eating a deductible" is classified as insurance fraud. In order for a contractor to do this, they would need to either: screw you over when you try to claim your RCBs (recoverable depreciation) or double invoice your insurance company. Double invoicing means that they will give the insured (you) an invoice for "xxx" dollar amount, while submitting a different invoice to the insurance company for a higher dollar amount. This higher dollar amount will conveniently be in the amount of your specific deductible. In other terms, your contractor is purposely lying to the insurance company! Once you (the insured/homeowner) have been made aware that your contractor is doing this, then you can be held liable as well!
Lets take a look at how most state laws will define insurance fraud.
This is the current Indiana insurance law which will hold true and be consistent with most states. Visit your local government facility to obtain the exact insurance law in your area.
INDIANA CODE 35-43-5-4.5
A person who knowingly and with intent to defraud:
(1) makes, utters, presents or causes to be presented to an insurer or insurance claimant, a claim statement that contains, false, incomplete, or misleading information concerning the claim.
(2) presents, causes to be presented, or prepares with knowledge or belief that it will be presented to or by an insurer, an oral, a written, or an electronic statement that the person knows to contain materially false information.
There ya' have it.... That is insurance fraud! Not a whole lot of room for grey area is there? If you and/or your contractor are found guilty of this, then you will have performed a Class C Felony! Once you commit a felony, you can no longer vote or purchase/carry a firearm. You will also face jail time and hefty penalties.
Now the question is... "Is my contractor doing this?" Unfortunately the answer is most likely, "Yes!" Most contractors are unaware that eating a deductible is insurance fraud; therefore most are going to openly advertise that they will do the job so you don't have to pay for your deductible... The competition is fierce out there! Especially after a new storm hits! Almost all contracting companies are going to feel inclined to offer "eating a deductible" to you because otherwise they don't feel like they can compete in the market. They can be a little sneaky with how they present this to you. They may also try to pressure you! You may have heard this before:
- I'll just do the job for "xxx" amount less than what the insurance company pays you. That way you don't have to worry about paying for your deductible.
- I'll give you "xxx" amount off of your total job cost as an advertisement discount; but only if you let me put my sign in your yard!
- I don't need "xxx" amount that the insurance company paid you to do your job... I'm a lot cheaper than the competition. If you decide to use me today I can do your job for less and you can keep the extra money!
There are other problems that can also arise from "eating deductibles." Unless you live in a state that is RCV only (i.e. West Virginia) your insurance company is only going to give you a portion of your settlement up front. This is called Actual Cash Value or ACV. Without going into huge details, ACV payments are best described as "ransom money!" The insurance company doesn't want to overpay for your claim so they want to make sure you are going to actually do the work for the amount that has been settled/agreed upon. Your insurance company is going to ask for a contract or invoice from your contractor. They basically want to make sure you are legally contracted to complete the work before they release the rest of your settlement to you. If the insurance company receives an invoice from your contractor that is "xxx" less than the total claim settlement amount (assuming your contractor is not double invoicing and submits the invoice amount that he/she is actually charging you), then the insurance company is only going to pay you the costs you have incurred, less your deductible. In other words, you are getting a crappier roof than you deserve because you will still end up paying for your deductible!
I can guarantee you if your contractor is willing to cheat your insurance company, then they are going to cheat you too! It may come in the form of your deductible, but your contractor is going to "cut corners" elsewhere so they can still make some sort of profit on your job. You will get a lesser quality roof if you go with a contractor who is doing the job for your deductible!
"IF YOU ARE A CONTRACTOR WHO IS KNOWINGLY DOING THIS TO YOUR CUSTOMERS..... SHAME ON YOU!"
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