Profitting From A Buildings Repair Insurance Claim

acbleeds

Thanks 2sides2everystory, a concise and descriptive answer with a few points to ponder. I can confirm however, the cause of the damage was completely genuine, for one, they were abroad and we traced the leaks (plural) back to some shattered fittings which are concealed and not accessible (so couldn't have been done by someone before they left for holiday for example).

I certainly will not provide any paperwork for the policyholder suggesting any involvement in work being done if this is not actually happening, I wont provide any false documents as fully realise this is definately stepping into dodgy ground.

If he gets full and final payment from the insurance, and it is perfectly legitimate for me to do so (if he is entitled to do whatever he pleases with the money), then I will happily take my payment (god knows, I could do with the money), but don't want to know if it's not legitimate or 'unlikely' to be considered so.

vaio

acbleeds wrote: »

.......I've read up some articles on the financial ombudsman website about 'exaggerated claims' which this seems to fall under and I really am beginning to think it's straightforward fraud because he is increasing the insurers liability beyond what it would otherwise be and therefore they would not pay out and cancel his policy if they found out. I just want to be absolutely sure for obvious reasons.... If the guy is willing to pay me £10k and it's legitimate for him to do so, I don't want to walk away from this with nothing other than wrong assumptions.

Tricky again, you say “exaggerated claim” but that amount been agreed by the insurance company using two independent means, your quote and their own surveyor/valuation system and both set of figures agreed.

Where does the exaggeration come in?

rogerblack

If I have rebuilding insurance for 180K - say - and my house is knocked down by a herd of elephants, I can of course legitimately sit in a deckchair and watch as they reinstate the house as it was.

Hmm. I suppose the house can't actually be reinstated as it was, if it did not meet current building standards, so it'd need to be at least somewhat upgraded.

What happens if I decide I'd rather the rebuilding was rather different, and cheaper. (assuming any changes were passed by planning and building control).

I suppose the question is - is the rebuilding to be done to a design, or to a cost.

dacouch

He wants to pay you such a large "drink" because the Insurers will more than likely require a final invoice from you before releasing the final payment. The drink is also to cover your potential tax liability for the invoice you submit for the work you "carried out".

I doubt the policyholder has received a "cash" settlement not depending on who he uses, if he had then he would not need / be willing to bung you such a large drink

Fraud issues aside, the Insurer could potentially be liable for any issues with the quality of the work or problems with it down the line which they will generally pass on to you as the contractor. You may find this link helpful http://www.financial-ombudsman.org.uk/publications/ombudsman-news/10/oct-repair-replace-cash.htm

vaio

rogerblack wrote: »

If I have rebuilding insurance for 180K - say - and my house is knocked down by a herd of elephants, I can of course legitimately sit in a deckchair and watch as they reinstate the house as it was.

Hmm. I suppose the house can't actually be reinstated as it was, if it did not meet current building standards, so it'd need to be at least somewhat upgraded.

What happens if I decide I'd rather the rebuilding was rather different, and cheaper. (assuming any changes were passed by planning and building control).

I suppose the question is - is the rebuilding to be done to a design, or to a cost.

My understanding is that if you have insured for say £200k rebuilding cost and the house burns down then you and the insurance company can agree what the repair cost would be (using quotes/surveyors), they pay you that amount in full and final settlement and then you can do what you like with the money, either rebuild or not. (as seems to have happened in this case)

The other way it can work is that the insurance take responsibility for repairs in that they engage contractors to do the works back to the pre fire state. In this case they only pay what the works actually cost as the builders are the agent of the insurance company but the insurance company have an ongoing responsibility for the standard of the works plus are responsible if any additional unforeseen works are discovered.

What I don’t think they can do is have bits from both methods ie avoid ongoing responsibility for standards and additional works by agreeing the costs, paying the policy holder and making him arrange for the works to be done and then quibble about the costs & methods after the event. (as the OP seems to be suggesting.)

Obviously if a builder supplies a deliberatly inflated quote or there are false invoices flying about then there is possibly a fraud implication but in this case the OP supplied an honest quote which tallied with the insurance companies own surveyors figures so was agreed.

crazyguy

They can pay what they want to have the work done there claim for 60k insurance was probaly legite and if they decided to only spend 30k on the repairs thats down to them the other 30k can be pocketed it is not fraud as the policy and subsequent paymenty were assesed on the flood damage at the time and the actual cost to put back to the original state may well have been 60k but as a policy holder if you dont want it the same way as before you are entitled to keep any difference, the only thing will be the insurance renewal and thats not down to you so take the money and dont panic as nothing can come back to you over it !

magpiecottage

dacouch wrote: »

Fraud issues aside, the Insurer could potentially be liable for any issues with the quality of the work or problems with it down the line which they will generally pass on to you as the contractor. You may find this link helpful http://www.financial-ombudsman.org.uk/publications/ombudsman-news/10/oct-repair-replace-cash.htm

I don't think they could in this instance. It seems clear that the policyholder has told the insurer that he wants the OP to do the work.

Provided the OP does not issue an invoice or receipt for actually doing it then in the event of a dispute he would honestly say that although he quoted for the work, he was never instructed to complete it.

At that point, a good complaints handler would start asking who actually did do the work and any fraud would be uncovered.

However, the OP does need to ensure his actions are squeaky clean.

dacouch

magpiecottage wrote: »

I don't think they could in this instance. It seems clear that the policyholder has told the insurer that he wants the OP to do the work.

Provided the OP does not issue an invoice or receipt for actually doing it then in the event of a dispute he would honestly say that although he quoted for the work, he was never instructed to complete it.

At that point, a good complaints handler would start asking who actually did do the work and any fraud would be uncovered.

However, the OP does need to ensure his actions are squeaky clean.

But from the sounds of it eg a £10k drink, the policyholder will be wanting an invoice from the OP for the full works eg for £60k. So it sounds like (to me) that they will be wanting a moody invoice

acbleeds

Thanks magpiecottage, my aim is to ensure I keep my operations 'squeeky clean', but if I can accept the money lawfully etc then obviously I would like to do so. If there's any doubt then I wont touch it. Maybe you can answer 2 points for me if you are willing...

1. Should I really be approaching the insurance company to tell them I have not been contracted so they are aware and therefore I cannot be deemed in any way to have gone along with this should they investigate in the future and decide it is fraudulent or similar?

2. Yes, the policyholder was always pushing for me to get the work, but at the same time, the insurance company never actually got around to getting any alternatives, so mine was the only actual quotation (which was then compared to a surveyors report commissioned afterwards), so if the insurance pay up in full upfront, does this mean they have definately given over all interest and responsibility in the repair and therefore leaving the policyholder to do what he wishes with the total and is perfectly entitled to pay me if he wishes?

Any which way it pans out, I have no intention in agreeing to issue any paperwork relating to this as this would clearly be false and have no intention of being implicated. I also assume if it goes down the route that he has to produce invoices to get the payments from the insurance company, he is well and truly screwed as these will be dramatically less than the quote value so he wont make any money in his pocket that way (personally I would not be disappointed by this result because he's really p***ed me off being so deceitful with me, using my name to deal with the insurance the way he has).

2sides2everystory

acbleeds, do also heed what dacouch says ... whilst you've got several informed views on the thread now, that one is from an industry insider who might know a bit about high net worth household claims and who I am guessing probably understands the picture you painted better than most. I particularly liked his reference to a "moody invoice" although I am still not sure what he means . I can guess, but being one of the world's innocents abroad I am sure I wouldn't get it in one :A ... ooh it can be murky, can't it? Doesn't bear much more thinking about. Now then ... I'm gasping for a first beer :beer: