can an insurance company hold back funds until the job is done?

I made a claim to have my garage roof re-done. The adjuster came out and approved the claim. He said that they send out a partial payment and when the work is done they need a receipt. They will then send the rest. Is this legal?

Asked on April 27, 2017 under Insurance Law, Minnesota

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

It's perfectly legal: they only need to pay the actual cost (subject to policy limit and deductible) if the work was in fact done; they can therefore wait until it's been completed, is proven to be done, and there is a final bill/receipt before sending the balance of the money.


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