Are my contractors committing fraud in my name?

LittlePie48

Hi, I've got a long-running home insurance claim going after an escape of water in my kitchen. After a couple of months of my insurance company being difficult, I hired a specialist company to manage my claim and do the restoration work.

We are now parting ways with the company after some of the building work went wrong, but in order to calculate how much we needed to pay them for work already done, I asked for a full breakdown of the quote the sent to the insurance company with prices for each item.

I know from the quote the kitchen supplier submitted that the units came to approx £6400 plus VAT. However, the building company charged the insurance company around £9900. I am seeking an explanation for this, but I know they add what they call an "uplift" to anything they supply, as we were going to order some extra kitchen units through them and they wanted to charge us an extra 20% on top for doing so. I suspect they may have done this with the kitchen quote.

However, this is more than 50% of the actual cost added on top, which seems excessive. I'm also thinking that if I was dealing with the insurance company directly, and I did this, I'd get in trouble for fraud! Is this an example of exaggeration fraud? Any advice welcome.

dunstonh

It is normal for contractors to add a margin to any goods bought.    Margins will vary from reasonable to very expensive.

It is not fraud.

Exodi

LittlePie48 said:

I know from the quote the kitchen supplier submitted that the units came to approx £6400 plus VAT. However, the building company charged the insurance company around £9900. I am seeking an explanation for this

Do you propose that the kitchen should have been fitted for free?

LittlePie48

Exodi said:

LittlePie48 said:

I know from the quote the kitchen supplier submitted that the units came to approx £6400 plus VAT. However, the building company charged the insurance company around £9900. I am seeking an explanation for this

Do you propose that the kitchen should have been fitted for free?

There was a separate charge for fitting and all other labour and materials. This was listed on the schedule as "kitchen units - actual sum".

LittlePie48

dunstonh said:

It is normal for contractors to add a margin to any goods bought.    Margins will vary from reasonable to very expensive.

It is not fraud.

I think I wouldn't have questioned it if it had been, say, 10% of the actual cost, but more than a 50% markup seemed a bit steep.

dunstonh

LittlePie48 said:

dunstonh said:

It is normal for contractors to add a margin to any goods bought.    Margins will vary from reasonable to very expensive.

It is not fraud.

I think I wouldn't have questioned it if it had been, say, 10% of the actual cost, but more than a 50% markup seemed a bit steep.

My estateman doesn't add a margin onto goods and supplies when doing my work.  Although I am his largest customer, so that gets us better terms.    However, we needed some electrical work done, and the contractors that came in charged nearly three times the price for the same items if I bought them (same brand, etc.). 

You should always check the markup on items when they supply them vs the cost of getting them yourself and the fitter charging you a fixed margin on top.   

DullGreyGuy

dunstonh said:

LittlePie48 said:

dunstonh said:

It is normal for contractors to add a margin to any goods bought.    Margins will vary from reasonable to very expensive.

It is not fraud.

I think I wouldn't have questioned it if it had been, say, 10% of the actual cost, but more than a 50% markup seemed a bit steep.

My estateman doesn't add a margin onto goods and supplies when doing my work.  Although I am his largest customer, so that gets us better terms.    However, we needed some electrical work done, and the contractors that came in charged nearly three times the price for the same items if I bought them (same brand, etc.). 

You should always check the markup on items when they supply them vs the cost of getting them yourself and the fitter charging you a fixed margin on top.   

Having absolute certainty is hard to get as making money on materials can be done by adding a margin, failing to pass on a discount and/or them getting a kickback. We recommend a certain piece of software to clients and they get a 5% discount from the website price because they buy through us but at the end of the year we get 10% of all the sales from our referral. 

Sure you can look to see how much you can buy the same materials for but knowing if the company gives others volume discounts or rebates is going to be more difficult to find out. It's like Howden's that have a catalogue for the general public and another for those with a trade account with very different pricing. 

LittlePie48 said:

Hi, I've got a long-running home insurance claim going after an escape of water in my kitchen. After a couple of months of my insurance company being difficult, I hired a specialist company to manage my claim and do the restoration work.

We are now parting ways with the company after some of the building work went wrong, but in order to calculate how much we needed to pay them for work already done, I asked for a full breakdown of the quote the sent to the insurance company with prices for each item.

I know from the quote the kitchen supplier submitted that the units came to approx £6400 plus VAT. However, the building company charged the insurance company around £9900. I am seeking an explanation for this, but I know they add what they call an "uplift" to anything they supply, as we were going to order some extra kitchen units through them and they wanted to charge us an extra 20% on top for doing so. I suspect they may have done this with the kitchen quote.

However, this is more than 50% of the actual cost added on top, which seems excessive. I'm also thinking that if I was dealing with the insurance company directly, and I did this, I'd get in trouble for fraud! Is this an example of exaggeration fraud? Any advice welcome.

Some insurers do exactly the same thing, pass the claim to their sister company who deal with it for a price and include that uplift in costs when trying to recover their outlay from a third party insurer. That tends to be c10% though not 50%.  

Why is the supplier present it to you? Loss Assessors would normally interact directly with the insurer