Spending total amount of settlement

sfjnet

Hi All,
I have a friend (no, it's not me) who claimed on her buildings insurance for damage done to a party wall by a leak in her neighbour's flat. She got a builder's quote of £900 for repairing the wall and redecorating the room which the insurance company agreed and paid out on, so she has the cash in her bank account. Since then however the builder has gone on an extended holiday and wouldn't be able to do the work until very late in the autumn so she has enquired and found a different guy who will do the work for about £300 less. The question is - is it permissible/legal for her to pay the new guy less money and keep the £300 for herself, or does she have to use the bloke who gave the original quote? If she chooses to do the former, is there any way the insurance company would contact the original builder after the fact, or expect a receipt from him for the work?
Thanks.

TSx

Are the insurance company intending to pursue the neighbour for the costs of the claim do you know?

sfjnet

I believe so, though the general feeling is that they wont be successful.

TSx

If they're looking to reclaim costs from the neighbour she'll most likely need to supply the insurance company with an invoice for the works and will be asked for this in the future. This could make things very tricky for her.

As to if it's legal or not, I'm not entirely certain and hopefully someone will be along to advise, but the principle of insurance is indemnity, and it's certainly unlawful to claim more than the actual amount of the loss. Whether this principle extends once a payment has been made, I'm not sure.