Insurance Claim Check Question?

  • by onetoughchick
  • Sep 02,2015
  • 5 answers

I filed an insurance claim for water damage in my basement (sewage, clean out drain issues etc). It cost a lot of money to have plumber remedy the main issue. The insurance claim money I received was to repair damage to basement ($3,000 estimated worth). I accepted the check. But, I decided to fix the damage myself (sanitized, repainted floors). But, still need to get inside a wall to clean. Anyways, my point is what I’ve done to remedy damage thus far has not cost $3,000. I confirmed with my adjuster that I can fix it or hire someone. Technically, I used a little bit of the money towards the damage but put the majority towards my honeymoon. The insurance adjusted called me today (about a month after I accepted check) to see if the repairs are complete. I said they are in progress, she requested I call her when it is done. Why is she calling asking this?


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Insurance Answers (5)

jmm2112 6 months ago

Because the insurer has the right to make sure that the repairs are actually done - and done right. They have an "insurable interest" in the house. The adjuster will insist on a final inspection.

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Casey Y 6 months ago

You cannot receive funds to repair your property and then use it for something else...that's called insurance fraud.
If you fail to repair the damage completely, they can cancel your policy and your next insurance policy will cost 3-5 times what you were paying before...and for worse coverage.

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Bill 6 months ago

Normally they only give you 2/3 of the cost of repair in advance and then the other 1/3 after the work is done as long as you can provide receipts to cover the amount of the claim. Since you are doing a lot of work your self, the cot should not be more than the original payment. Good Luck

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mbrcatz 6 months ago

Because, having partially repaired, or unrepaired damage, is an "increase in hazard". Your insurance company is going to want to make sure the repairs are complete, and with good workmanship. If you do not repair the house completely, they will cancel your policy for "increase in hazard - unrepaired damage" and you likely won't find anyone else willing to sell you house insurance.
You won't be able to hide the fact that you had the claim - there's an information clearinghouse where every new carrier will check, to see if you've filed any claims. That water damage claim is a HUGE red flag.

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Dion J 6 months ago

Most small losses like this are settled on the basis of "agreed amount". If there was not a recoverable deduction for depreciation, it is up to the insured (you) to have the repairs completed by whoever you see fit, at whatever cost it takes to do so. That you may end up spending less than the agreed amount is not, in and of itself, insurance fraud.
If there was a deduction for recoverable depreciation, final settlement is based on the actual documented cost.
Otherwise, adjusters rarely follow up to ensure repairs have been completed. Typical reasons for doing so would include;
- If repairs are not completed, and the damaged area sustained a loss in the future, repairs would not be paid a second time.
- If incomplete repairs contributes to an increased hazard, underwriting may get involved. Actions could include a rate change, cancellation, or requirement that repairs be completed.
- Suspected insurance fraud.

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