Contractor Overbilled Insurance Without My OK – What Are My Options? (Akron, OH)

[Seyi Kongi]

Hi everyone, I'm an out of state investor in Akron, OH, dealing with a tricky situation on one of my rentals, and I could really use some advice, especially from those with experience in insurance claims or any attorneys in the community.

What Happened:

Three weeks ago, a tree branch fell on my rental in Akron, OH. I called two local tree removal companies and received quotes after walking the property:

• One for $4,500
• One for $5,500 (they had immediate availability, so I was leaning toward them)

While speaking with the $5,500 company about referrals for tarping and roof repair, they referred me to a general contractor (GC) who they’ve worked with on roof repairs in the past.

The Contractor

• I called him after and he says he works with insurance companies all the time, and that I’d only be responsible for my $5,000 deductible.
• He asked me to sign a contract (which I did), stating he’d act in my best interest and perform all work based on what the insurance approves.
• After inspecting the property, he called the same $5,500 tree company to remove the tree branch. (I assumed it would be billed at the quoted price or even a slight premium which would have been ok).
• I asked for the invoice for the tree branch removal, and he says will be handled with insurance, I then asked to be copied when he sent the invoice to the insurer, he said he would, but he never did.

The Problem:

I later received an estimate from my insurance company for $34,000, which includes:

• Partial roof repair
• Chimney repair
• Minor drywall patching
• $10,200 for tree branch removal
• I was caught off guard, I already had a written quote for $5,500, and no one informed me the price had changed.

When I questioned the GC, he said the price increased because a second crane was needed. However:

• There was no communication from the Tree company or the contractor about any price change — not before, during, or after the work.
• I then called the tree company directly, they confirmed the new $10,200 figure (matching what the contractor submitted to insurance without my knowledge), but they also confirmed hey have not been paid yet, despite the Contractor claiming he already paid them.
• I asked the Tree company, why I wasn’t informed of the price change after the original quote for my approval/authorization, he wouldn’t answer, just kept on saying it was the new price they had to get a second crane in to remove the branch

My Concerns:

• The GC refuses to give me a detailed breakdown of the $34,000 or scope of work to be completed/quote. He says the insurance estimate is the quote.
• I believe this is overpriced for the scope of work (only a partial roof repair, chimney fix, and minor interior patching).
• I’m currently seeking 2–3 additional quotes from other roofing companies to compare.
• I'm also worried about how this claim might impact my insurance premiums or risk being dropped, especially since I have other properties covered under the same insurer and LLC.
• I’ve never filed a claim before, and I know insurers often ask about claim history when purchasing or refinancing.

My Questions:

1. Am I able to terminate the agreement with the contractor?
2. If I decide to terminate my agreement with the Contractor, am I obligated to pay the $10,200 tree removal charge, even though I only authorized the $5,500 quote?
3. Since there was no communication or approval for the price increase, do I have a valid basis to dispute that charge?
4. Has anyone else had a similar experience with inflated costs like this? What’s the best way to protect myself legally and financially?

Thanks in advance for any guidance, referrals. I want to make sure I’m smart here before moving forward.

[Greg Scott]

I have extensive experience managing insurance claims.  It is a counter-intuitive process and I can tell it is creating confusion.

First, the insurance claim payout amounts are governed by law.  Typically, they require the payout to be able to cover the 95th percentile of cost, and may have a much larger scope of work than you would do yourself.  In other words, there is usually a LOT more money you can get from your insurance claim than what you need to actually complete the repairs. 

The insurance company can try to pay you less, and if you accept, that is your payout.  However, you are going to be better off collecting what you are legally due, and with the excess cash, have your contractor fix other things on the property you wanted repaired.  You don't get any bonus points at your next insurance renewal for having saved the insurance company a few dollars.

You definitely want a GC that understands the insurance claim process.  The unethical ones, working with uninformed owners, simply pocket the excess profit.  The ethical ones will give you good value for the insurance money on other improvements to your property.  I've typically had my deductible paid by the GC, which is also legal to do.  They may be able to also remove the branch for $5,500, even though insurance will pay $10,200 and then give you $4,700 of repairs on another part of the house.

For example, we had a fire in one building.  We repaired everything the insurance claim covered.  We had enough money to also do the following:
- Re-roof a different building
- Add insulation in that different building
- Completely re-plumb the building that was affected by the fire (and this was not in the claim)

Have a conversations with your GC about how this will work.