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Contractor billed insurance company for non existent services

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So we had a contractor do some work that was covered under insurance and in reviewing the line items I see they billed for and the insurance company paid for services that never took place. I inform the adjuster and he brushes it off. Here are some excerpts: "I often tell home owners to not look too much into it because they have a specialty service that warrants certain pricing."  " Just because it says ________, doesn't mean a_______." 
I'm baffled as to why he doesn't care because they blatantly lied in their billing....

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Because it's not his money and it didn't go over the payout?

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Details of the discrepancy? Was this contractor chosen by the insurer? If you think there is fraud or collusion, report the adjuster to the company. Insurers (and ultimately you in the form of premiums)don't want to pay for services not rendered.

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If the adjustor approved X to be done and the contractor bills for X, but doesn't actually do X. I would think that would be between the homeowner and the contractor to have him actually do the work if it indeed needed to be done.

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So many possibilities, some criminal! Is the adjuster independent of the company? Is he a 'friend' of the contractor? Is the contractor being squeezed by the company? Was some of the extra work not explained? Too many questions, but your only dilemma is to let it go, or start an investigation which could damage an innocent party. Perhaps an off the record conversation with the contractor would be sufficient, but just like medical billing maybe that's the only way he can get paid to cover his costs. If you have all the info, and truly believe this is fraud, some state insurance departments have an anonymous fraud tip line, but it wouldn't take a genius to figure out who made the complaint, since you've already made an inquiry!

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What does the bill actually say and what was actually done?

When I see " Just because it says ________, doesn't mean a_______." it sounds like the adjustor is saying this is just a disagreement on terms or something trivial that doesn't matter, more like a semantic argument.

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How much money are we talking about?

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kb2120 said:   If the adjustor approved X to be done and the contractor bills for X, but doesn't actually do X. I would think that would be between the homeowner and the contractor to have him actually do the work if it indeed needed to be done.
  
Sounds like the contractor billed for more work than was needed, not that they didn't complete the work the homeowner asked for.

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dannon35 said:   Details of the discrepancy? Was this contractor chosen by the insurer? If you think there is fraud or collusion, report the adjuster to the company. Insurers (and ultimately you in the form of premiums)don't want to pay for services not rendered.
  
I left the discrepancy blank because I don't want to go into too much detail but they really billed for the same thing twice using different terminology. The adjuster is young and perhaps naive, I doubt there is any collusion and believe he doesn't want to admit he may have overlooked this. I am, however, not happy that the company is trying to pull a fast one and since the insurance company paid us directly and we're responsible for paying the contractor I'm going to withhold that amount until & unless they can substantiate it, which would require them to fabricate an invoice from a third party because they are indicating they had a very specific service at the house when there was none. The amount in question is between $500 & $1000 so it's not insignificant and represents about 7% of the entire bill.

We pay ~$3k per year and that's with a hefty several thousand dollar deductible so I don't want to indirectly increase our premium. The contractor has now backed himself into a corner because there is no way he can prove this unless he decides to either fabricate an invoice or to say that someone made an error...

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LOOPHOLE said:   
dannon35 said:   Details of the discrepancy? Was this contractor chosen by the insurer? If you think there is fraud or collusion, report the adjuster to the company. Insurers (and ultimately you in the form of premiums)don't want to pay for services not rendered.
  
I left the discrepancy blank because I don't want to go into too much detail but they really billed for the same thing twice using different terminology. The adjuster is young and perhaps naive, I doubt there is any collusion and believe he doesn't want to admit he may have overlooked this. I am, however, not happy that the company is trying to pull a fast one and since the insurance company paid us directly and we're responsible for paying the contractor I'm going to withhold that amount until & unless they can substantiate it, which would require them to fabricate an invoice from a third party because they are indicating they had a very specific service at the house when there was none. The amount in question is between $500 & $1000 so it's not insignificant and represents about 7% of the entire bill.

We pay ~$3k per year and that's with a hefty several thousand dollar deductible so I don't want to indirectly increase our premium. The contractor has now backed himself into a corner because there is no way he can prove this unless he decides to either fabricate an invoice or to say that someone made an error...
 

  ta daaaaa......now you want to explore with FWF how you can benefit here....  
I'm going to withhold that amount

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Sounds like you have a contractor in your pocket now, or he will try to double take you and place a lien on your home then the lawyers win.  Keep us posted, poppin corn.

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If you are going to directly pay the contractor, why did you involve your insurance? I guess you already got a check from them for the covered loss.

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LOOPHOLE said:   We pay ~$3k per year and that's with a hefty several thousand dollar deductible...Pics? (of the mansion)

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Sounds like the contractor is at fault and over billed-- Perhaps take this up with them to see if they can explain the discrepancies.

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I don't have a lot of experience with home owner's insurance, but did file a claim for roof damage. The adjuster asked if we had any other damage at all in the house and I told hime about a very small water stain in one bedroom (honestly, so small I wasn't going t worry about it). It was interesting to see the very detailed line-item report from the insurance company. For the small water stain in the bedroom, there was outlined the cost to remove/reinstall furniture and wall hangings, remove and respray ceiling texture, remove/reinstall light switch and outlet covers, etc, all in addition to the actual repair. I asked the contractor about this and he said the insurance company just plugs damage into a program and it spits out typical work tasks that need done and a cost associated with each task. He also said he will take care of the damage or I can do it and he will cut me a check for the portion of the claim.

Was the detailed line-item list you saw produced by the contractor or insurance company? If it's from the insurance company it just may be they way they justify or validate a claim's dollar amount. Also, if you have items that were never done, that portion of the claim may be owed to you from your contractor (if the insurance company paid the contractor directly).

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Often times contractors (and auto body shops do this too) inflate their prices when dealing with insurance companies. The problem is, we all pay the price for this in the form of higher premiums.

Often it's best to present the highest estimate to the insurance company, get your check, and then deal directly with a lower cost contractor (don't have the contractor bill insurance directly). This is all perfectly legal. You also have the right to just keep the check and not fix the home/car.

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LOOPHOLE said:   
dannon35 said:   Details of the discrepancy? Was this contractor chosen by the insurer? If you think there is fraud or collusion, report the adjuster to the company. Insurers (and ultimately you in the form of premiums)don't want to pay for services not rendered.
  
I left the discrepancy blank because I don't want to go into too much detail but they really billed for the same thing twice using different terminology. The adjuster is young and perhaps naive, I doubt there is any collusion and believe he doesn't want to admit he may have overlooked this. I am, however, not happy that the company is trying to pull a fast one and since the insurance company paid us directly and we're responsible for paying the contractor I'm going to withhold that amount until & unless they can substantiate it, which would require them to fabricate an invoice from a third party because they are indicating they had a very specific service at the house when there was none. The amount in question is between $500 & $1000 so it's not insignificant and represents about 7% of the entire bill.

We pay ~$3k per year and that's with a hefty several thousand dollar deductible so I don't want to indirectly increase our premium. The contractor has now backed himself into a corner because there is no way he can prove this unless he decides to either fabricate an invoice or to say that someone made an error...

  I'm confused here.  you are generally either in a direct pay from the insurance to the contractor based upon the work identified by the adjuster, or you are essnetially hiring the contractor and getting paid by the insurance company.

if its the former, it sounds like the adjuster identified the work and either identified it twice, or its 2 aspects of the job that sound similar.  If its the latter, you have an agreement with the contractor independent of the insurance company and you should pay the contractor what you agreed to.
Honestly, all these insurance companies and adjusters have codes for all this crap and they hit the codes and make the estimate.  One may be furnish X material with another being installing it.  Sometimes they are inflating numbers, sometimes not.  Sometimes it costs 2000 to get the job done and the insurance is willing to pay 1200 for that code an 800 for another so both codes get put in to keep everyone happy, rather than finding a real cut rate company that charges $1200.  

You can ask the contractor if you don't think the adjuster's answer makes sense.  I wouldn't start a complaint unless you really understand what is going on here.

 

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I'm confused why the contractor billed the insurance company.
Sounds like all of the work to be done should have been between you and the contractor.

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imbatman said:   I'm confused why the contractor billed the insurance company.
Sounds like all of the work to be done should have been between you and the contractor.

  it was an insurance claim paid by the insurance company

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LOOPHOLE said:   
dannon35 said:   Details of the discrepancy? Was this contractor chosen by the insurer? If you think there is fraud or collusion, report the adjuster to the company. Insurers (and ultimately you in the form of premiums)don't want to pay for services not rendered.
  
I left the discrepancy blank because I don't want to go into too much detail but they really billed for the same thing twice using different terminology. The adjuster is young and perhaps naive, I doubt there is any collusion and believe he doesn't want to admit he may have overlooked this. I am, however, not happy that the company is trying to pull a fast one and since the insurance company paid us directly and we're responsible for paying the contractor I'm going to withhold that amount until & unless they can substantiate it, which would require them to fabricate an invoice from a third party because they are indicating they had a very specific service at the house when there was none. The amount in question is between $500 & $1000 so it's not insignificant and represents about 7% of the entire bill.

We pay ~$3k per year and that's with a hefty several thousand dollar deductible so I don't want to indirectly increase our premium. The contractor has now backed himself into a corner because there is no way he can prove this unless he decides to either fabricate an invoice or to say that someone made an error...

  If OP is responsible for paying the contractor, the contractor should be sending the bill to OP, regardless of if it's an insurance claim or not

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So, if you are withholding the supposed fraudulent charges, are you going to return that money to the insurance company? Or are you going to keep it?

Seems like you want to profit from the contractor's fraud. How is that any better than what you say he did? I see two outcomes...

1. You are taking money from a contractor willing to commit fraud (a criminal). Not only does that make you complicit in the crime, but do you want an angry GC coming after you? He has many illegal actions he could take against you.

2. You are taking money from an honest contractor, because you don't understand how billing works. So again, angry contractor coming after you. He has many legal actions against you, you have none against him.

Either way, you are on the losing end of the deal. Popcorn popping, please keep us updated!

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