Is it insurance fraud if you don't use the money from the insurance company to fix the roof?

Question

There was a small storm and most everyone in the town got a new roof. The neighbor just died and the estate put in a claim with the insurance company for the roof, but they did not get the roof replaced. Instead, they say they "put the money back into the estate". What????? Don't they have to get the roof fixed?

Answer 1

They can choose whether or not to replace the roof. What they have been paid is for a destroyed roof. Their choice whether to repair or not. My car was hit from behind. I filed with the insurance company whose assessor saw the damaged paintwork and awarded me money to get it fixed. As it so happened, on closer inspection, the damage was actually paint adhering from the other driver's car. Mine was undamaged. The money is now in the bank waiting to be spent on other car-related requirements.

Answer 2

No, they don't.  The insurance company reimburses the insured for their loss.  What the insured does with the money is the insured business.  If they had to use it solely to fix the roof and it cost less than the insurance paid, do you think the insurance company would demand the difference back?  And, conversely, if the roof cost more, would the insurance company pay more? No. The money reimburses you for your loss - that's all.

Answer 3

yes they do, that is what the check was intended for.

Answer 4

No it is not, if the initial claim was legitimate, however if the money has been spent on something else, someone will have to pay for the roof to be fixed.  It will probably be hard to sell the place with a leaky roof too.

Answer 5

No it isn't insurance fraud.  The money was to compensate the insured for a roof that was damaged.  If they only had actual cash value, (value of roof minus depreciation)they might not have got enough money to fix the roof.  If they have replacement cost they would have got the full amount to replace roof, but they are under no obligation to fix it. but if another storm happens and the roof blows off they will not be covered.