Insurance overpayment question - Camaro5 Chevy Camaro Forum / Camaro ZL1, SS and V6 Forums

Nessal · 10-17-2012, 12:28 AM

I got a quick question for you guys....

Say for example, there was some damage done to my home and the insurance company had the damaged assessed by an outside company. Lets call this company A. They determined that it would cost them $20k to fix the damage. So the insurance cut us a check for $20k to fix the house.

After going through the list of things that this company wanted to fix, we were not satisfied with it. So we hired company B that was willing to actually replace things instead of just "cleaning" it. The total end bill was actually CHEAPER than company A by $1k.

What do we do with the difference? The insurance company is now asking for receipts for the repairs. Since the actual repair was less than the estimated amount, do we have to cut them a check back for the difference?

My personal opinion is no. The reason being that the house did take a "loss" of 20k. The insurance company is supposed to pay for the "loss" on the house. However, the amount spent to fix it is solely at the discretion of the owner. If say the owner does not need the repairs to be "perfect" and there is a price difference, it is for the owner to keep because he did take a "loss" at the full value to begin with.

What say you guys?

Mr_Draco · 10-17-2012, 04:29 PM

If they ask you to give them back the extra you will be required to give it back. The money is not yours. It was given to you to pay for the repairs and nothing else. So if they ask you can do 1 of three things 1) give it back, 2) don't give it back and they adjust your premiums likewise and get it back plus extra anyway, 3) don't give it back, be dropped from your insurance and be taken to court where you will be forced to pay it back, plus court costs, plus lawyer fees.

And fyi, switching to a cheaper company and pocketing the extra could very well be spun into insurance fraud which is a jail-able offense and most insurance companies won't touch you after this is put on your record.

CHMSC · 10-17-2012, 04:34 PM

Quote:

Originally Posted by Mr_Draco

If they ask you to give them back the extra you will be required to give it back. The money is not yours. It was given to you to pay for the repairs and nothing else. So if they ask you can do 1 of three things 1) give it back, 2) don't give it back and they adjust your premiums likewise and get it back plus extra anyway, 3) don't give it back, be dropped from your insurance and be taken to court where you will be forced to pay it back, plus court costs, plus lawyer fees.

And fyi, switching to a cheaper company and pocketing the extra could very well be spun into insurance fraud which is a jail-able offense and most insurance companies won't touch you after this is put on your record.

Nessal · 10-18-2012, 10:54 AM

Quote:

Originally Posted by Mr_Draco

If they ask you to give them back the extra you will be required to give it back. The money is not yours. It was given to you to pay for the repairs and nothing else. So if they ask you can do 1 of three things 1) give it back, 2) don't give it back and they adjust your premiums likewise and get it back plus extra anyway, 3) don't give it back, be dropped from your insurance and be taken to court where you will be forced to pay it back, plus court costs, plus lawyer fees.

And fyi, switching to a cheaper company and pocketing the extra could very well be spun into insurance fraud which is a jail-able offense and most insurance companies won't touch you after this is put on your record.

Noted.

However, let's put it this way. You buy a Camaro and it gets stolen. You decided to replace your Camaro with a Civic. Now does the insurance company say, "Well you are replacing your Camaro with a Civic so we are only going to cut you the check for the price of the Civic and not the Camaro."?

No, you had a initial loss on the Camaro not the Civic. You are paying your premium on a Camaro, not a Civic. It's the same principle. If what you say is the case, then why don't I just tell the insurance agent to lower my premium because if I total my car, I would only be replacing it with a cheaper car. What's the point of me paying a higher premium to cover something that has more value?

Ocikat · 10-18-2012, 12:16 PM

The purpose of insurance is to make you "whole" in the event of a loss, meaning it should put you back in the same position you were before the loss. if the payment was more than required to make you whole again the ethical thing to do would be to return the excess to the insurance company, or at least discuss it with them. If the opposite situation occured and thier estimate didn't cover your losses I doubt that many people would hesitate to ask the insurance company for more. In the case you mentioned about the Camaro Vs Civic, you still had a loss of your Camaro and the insurance company would make you whole again by comensating you the value of that Camaro at the time of loss, if you choose to replace it with something of lesser value the insurance company still has made you whole again by paying for the value of your loss. Imagine if you had a total loss of your Camaro and your insurance company wanted to replace it with a Yugo claiming it's still a car, it has 4 wheels and a motor.

Mr_Draco · 10-18-2012, 03:55 PM

Quote:

Originally Posted by Nessal

Noted.

However, let's put it this way. You buy a Camaro and it gets stolen. You decided to replace your Camaro with a Civic. Now does the insurance company say, "Well you are replacing your Camaro with a Civic so we are only going to cut you the check for the price of the Civic and not the Camaro."?

No, you had a initial loss on the Camaro not the Civic. You are paying your premium on a Camaro, not a Civic. It's the same principle. If what you say is the case, then why don't I just tell the insurance agent to lower my premium because if I total my car, I would only be replacing it with a cheaper car. What's the point of me paying a higher premium to cover something that has more value?

Sorry bud but your example is so stupid and so far off in left field from comparing to the scenario you posted it's not even in the same ball park.

Now lets say instead of giving you the $20k to repair your house, the insurance company decided to kick you out of your home and made you move into a single wide trailer. You see how stupid this scenario is? This is exactly how stupid the scenario is that you posted.

An insurance companies job is to cover your loses and to return you whole again. By your own admission, you sustained $19k in damage, not $20k, so they only have to cover the $19k. Anything over this you will be required to give back if they request it. The money is not yours. It is theft and if they seek legal action they will win. Period. No discussion. No debate. No what-ifs.

Nessal · 10-18-2012, 10:00 PM

The damage that was sustained was not 19k but 20k as backed up by multiple contractors. If I chose to go a cheaper route to repair the house that should not be held against me. Like you daid you are reimbursed for the loss and the loss was 20k. In order to make that 20k loss whole the company will reimburse 20k.

And my analogy isn't any different than my proposed question. You have something of higher value that was damaged. The insurance company reimbursed you for the loss on the original value. You take that money and replace it with something cheaper. You still had a initial loss of 20k. However your analogy got me scratching my head.

Regardless, I already submitted all the paperwork to my insurance company and asked this exact question so we'll see what's right in a few days.

Nessal · 10-18-2012, 10:55 PM

Did some quick research and it appears you're wrong. Regardless my agent will let me know after I hear back from him.

http://en.allexperts.com/q/Property-...ce-Payment.htm

http://www.auto-insurance-claim-advi...ss-to-fix.html

http://www.ehow.com/info_8290704_can...nce-check.html

http://boards.straightdope.com/sdmb/.../t-626935.html

10-17-2012, 12:28 AM	#1
Nessal Drives: Exige, Miata, Ghia Join Date: Jun 2011 Location: CA, Bay Area Posts: 2,309	Insurance overpayment question I got a quick question for you guys.... Say for example, there was some damage done to my home and the insurance company had the damaged assessed by an outside company. Lets call this company A. They determined that it would cost them $20k to fix the damage. So the insurance cut us a check for $20k to fix the house. After going through the list of things that this company wanted to fix, we were not satisfied with it. So we hired company B that was willing to actually replace things instead of just "cleaning" it. The total end bill was actually CHEAPER than company A by $1k. What do we do with the difference? The insurance company is now asking for receipts for the repairs. Since the actual repair was less than the estimated amount, do we have to cut them a check back for the difference? My personal opinion is no. The reason being that the house did take a "loss" of 20k. The insurance company is supposed to pay for the "loss" on the house. However, the amount spent to fix it is solely at the discretion of the owner. If say the owner does not need the repairs to be "perfect" and there is a price difference, it is for the owner to keep because he did take a "loss" at the full value to begin with. What say you guys?

10-18-2012, 12:16 PM	#5
Ocikat Drives: 2012 2LT 45th convertible Join Date: Jul 2010 Location: Albuquerque Posts: 949	The purpose of insurance is to make you "whole" in the event of a loss, meaning it should put you back in the same position you were before the loss. if the payment was more than required to make you whole again the ethical thing to do would be to return the excess to the insurance company, or at least discuss it with them. If the opposite situation occured and thier estimate didn't cover your losses I doubt that many people would hesitate to ask the insurance company for more. In the case you mentioned about the Camaro Vs Civic, you still had a loss of your Camaro and the insurance company would make you whole again by comensating you the value of that Camaro at the time of loss, if you choose to replace it with something of lesser value the insurance company still has made you whole again by paying for the value of your loss. Imagine if you had a total loss of your Camaro and your insurance company wanted to replace it with a Yugo claiming it's still a car, it has 4 wheels and a motor. __________________ Top Ten Reasons I Procrastinate 1.

10-17-2012, 04:29 PM	#2
Mr_Draco Drives: 2SS/RS Join Date: Sep 2008 Location: Western North Carolina Posts: 7,181	If they ask you to give them back the extra you will be required to give it back. The money is not yours. It was given to you to pay for the repairs and nothing else. So if they ask you can do 1 of three things 1) give it back, 2) don't give it back and they adjust your premiums likewise and get it back plus extra anyway, 3) don't give it back, be dropped from your insurance and be taken to court where you will be forced to pay it back, plus court costs, plus lawyer fees. And fyi, switching to a cheaper company and pocketing the extra could very well be spun into insurance fraud which is a jail-able offense and most insurance companies won't touch you after this is put on your record.

10-18-2012, 10:00 PM	#7
Nessal Drives: Exige, Miata, Ghia Join Date: Jun 2011 Location: CA, Bay Area Posts: 2,309	The damage that was sustained was not 19k but 20k as backed up by multiple contractors. If I chose to go a cheaper route to repair the house that should not be held against me. Like you daid you are reimbursed for the loss and the loss was 20k. In order to make that 20k loss whole the company will reimburse 20k. And my analogy isn't any different than my proposed question. You have something of higher value that was damaged. The insurance company reimbursed you for the loss on the original value. You take that money and replace it with something cheaper. You still had a initial loss of 20k. However your analogy got me scratching my head. Regardless, I already submitted all the paperwork to my insurance company and asked this exact question so we'll see what's right in a few days.

10-18-2012, 10:55 PM	#8
Nessal Drives: Exige, Miata, Ghia Join Date: Jun 2011 Location: CA, Bay Area Posts: 2,309	Did some quick research and it appears you're wrong. Regardless my agent will let me know after I hear back from him. http://en.allexperts.com/q/Property-...ce-Payment.htm http://www.auto-insurance-claim-advi...ss-to-fix.html http://www.ehow.com/info_8290704_can...nce-check.html http://boards.straightdope.com/sdmb/.../t-626935.html