$$$ Paid but No work Done yet $$$ Spent!!!

[ChrisTechMech]

I live in Ohio and had wind damage to my fence and roof. I filed a claim with my HO insurance. I received a check in my name and the contractor's name for about $7000. The fence was repaired and the contractor was paid $980. Due to scheduling conflicts, we never replaced the roof and in the meantime I spent the money (during hard times). The insurance company informed the IRS that the contractor was paid $7000 but in fact he only got $980 per the work he did. I was told by a builder friend of mine that if I told the insurance company that he didn't do the work, the insurance company would likely drop me. I intend on having the roof replaced this summer (probably by myself, I'm qualified) but what do we do about this situation in the meantime. The contractor called me because he obviously doesn't want to be taxed for money he didn't receive. Thank you.

 

[ecmst12]

Your insurance company will be upset that you have not repaired the property. You can tell them that you have decided to go with another vendor to replace the roof and so the contractor they sent the 1099 to did not receive all that money. Normally if you can find a way to repair the damage cheaper, the difference is yours to keep, however if you have a leinholder (mortgage), they will want to make sure that their property is in acceptable condition. You won't know how big of a stink they will make until you tell them though.

And of course, your contractor had to endorse the whole check before it could be cashed, so that's evidence that he did in fact get all the money, just gave some of it back to you.

 

[joulian]

I was just wondering about the same. I had my house damaged as well and we had to reframe the roof and reshingle it. We did it ourselves and of course hired some guys to help us out. I mostly supervised to make sure it was going as should be and I bought materials and all as well. What I am wondering is how do i invoice the insurance company now. I have never had an insurance claim ( been very lucky for a long time I guess ). I don't know how to do this. Do i just write my name on the invoice and write an amount on it? I looked up the price and asked some contractors in town and they told me X amount. Is that what I need to stick too?