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Thomas McJD
Thomas McJD, Attorney
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I am on a condo board which received a large insurance claim

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I am on a condo board which received a large insurance claim to pay for repairs for damage from Superstorm Sandy. Our management company would like us to work with a contractor who has done other work for them. This contractor has offered NOT charge us for the (sizeable) deductible and will do the job for insurance proceeds only. One of the board members claims that this is insurance fraud because any contractor who acts to allow the insured to avoid the deductible, without the insurer's permission, is knowingly misrepresenting material facts to the detriment of the insurer. Please confirm if this is true. Thank you.


Hi, I will be happy to assist you, and it is my goal to make you a very satisfied customer! This may take a few minutes, so thanks for your patience.


Once the insurance company has estimated the repairs, it pays the claim amount less the deductible. If the insured can then get the work done for less money than the estimate, then the difference can be pocketed. Thus, there is nothing wrong with such a scenario as long as the property owner didn't misrepresent damages so that the estimate was higher than it should have been. There is no insurance fraud in that situation.


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