We recieved insurance payment as should be – had a few things come up and cannot pay cleaner all right now?? Is this fraud or what can happen?

Free Insurance Quote Comparison

 Secured with SHA-256 Encryption

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Full Bio →

Written by

UPDATED: Sep 21, 2012

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

Insurance Question from Dutchtown, IA

Asked on 09/21/2012

We recieved insurance payment as should be – had a few things come up and cannot pay cleaner all right now?? Is this fraud or what can happen? We had a house fire - recieved full payment for cleaning services. Some unexpected things arised. We told the cleaning services we can only pay part of the cleaning services & then make payments. They said they want a particular amount or they will turn it in. That this is fraud. Is this insurance fraud? What can happen??

Answer given on September 26, 2012

If you had a fire loss under your homeowner insurance, the insurance company usually pays the vendor, in this case the cleaning company, directly. Since your insurance company decided to make the payment directly to you, you are responsible to pay the vendor for their services.The fact that you had ” a few things come up” so you spent the money owed to the cleaning company, does not exonerate you from the debt to the cleaning company. They have the right to expect prompt payment for their services. They can turn you over to a collection agency to get their payment. You really did not have the right to spend the money that was due the cleaning company. Those funds were intended for the repairs to your property due to the fire claim.The cleaning company can make a report to the insurance company. It’s not clear what could come of that report. It is possible that the insurance company will non-renew your insurance, or they may not get involved at all.


IMPORTANT NOTICE: These answers are for general information purposes only and are provided by the person answering and FreeAdvice.com AS IS. It has not necessarily been reviewed by the management staff of FreeAdvice.com nor is it binding any insurance agent, broker, or other insurance professional or any attorney or insurance company. Insurance laws, regulations and practices vary from state to state and insurance policies and practices differ from company to company, by type of policy, by state and locality and by type of insurance. Tiny variations in the facts, policy language or a detail not set forth in a question often can change the outcome or a professional's conclusion. Although FreeAdvice.com has confirmed that the answer(s) was/were provided for the account of an experienced insurance professional, that professional may not be licensed in the state referred to in the question, and may not be experienced or up to date in the subject area. Unlike the answers provided here, upon which you should NOT rely, for personal advice you can rely upon we suggest you consult a licensed insurance professional in your area or retain a licensed attorney listed on AttorneyPages.com to represent you.

Free Insurance Quote Comparison

Enter your ZIP code below to compare cheap insurance rates.

 Secured with SHA-256 Encryption