Can I keep excess proceeds from an insurance claim?

excess money found from insurance

Can I keep excess proceeds from an insurance claim? 

Is it legal? Is it ethical? How much can I make? How to do it? The questions keep coming once someone gets the hint they can “make some money” by putting on a new roof.

Wrong! The focus should be finding the highest quality roofer who can install a quality roof at a competitive price.

Recently we received this comment with two excellent questions. In this blog, we’ll answer #1 and next #2

Love your blog and the info that is provided here. I am a bit concerned with shady tactics #4. You talk about how disreputable companies absorb deductibles and it being illegal, which I understand and agree with. My concern falls under the spreadsheet you post on your site multiple times regarding profit to the owner.  How is it legal and ethical to make me profit from a claim? {emphasis added by RoofBidders}

Isn’t that the same as absorbing deductibles? {emphasis added by RoofBidders} I only ask as I love the idea of this however don’t want to get involved into something that could get me into trouble. Look forward to hearing from you and keep up the good work!!

How is it legal and ethical to make a profit from a claim?

The most accurate answer is: “It is not; intentionally trying to profit from a claim is not legal”.  Yet, the key word is intentional.  Whether or not it is unethical depends on whether the actions are unethical, such as lying or duping the insurance carrier.

Is it legal (or ethical) to keep excess proceeds from an insurance claim?  YES!

When a homeowner uses RoofBidders, we share our profits, so there is not “excess” but we’ll tackle how that works next blog. But it can be legal and ethical to do so.  Here are two examples:

  • EXAMPLE #1: All insurance companies must permit homeowners to pick their own contractor.  Here is a section from my personal homeowner’s policy.  Note the final sentence…“You have the right to have your home repaired by the repair person of your ”

Assume you have a friend in the contracting business who agrees to do the work at cost or even as a favor for you. The insurance company will send the initial check (the actual cash value component).  Your friend (your selected contractor) completes the work for less than the money given to you. You, the homeowner keep the difference.  This is legal.

  • EXAMPLE #2: You do the repairs yourself since you are skilled in the trade.  Again, the insurance company pays the actual cash value, you do the work for less, and again you legally keep the difference.

So is it ethical to profit from an insurance claim?  Not if you are illegally gaining the proceeds.

In the above examples, we were dealing with the Actual Cash Value part of the insurance claim.  Things go awry when the homeowner or roofer fraudulently seek the second component, the replacement value payment (or recoverable depreciation).

  • It is illegal to dupe your insurance company so you can intentionally profit from an insurance claim.
  • It is illegal to lie and claim that a deductible has been paid, when it has not.
  • It is unethical, not to mention illegal, to look the other way and let the roofer handle the lying and duping instead of you doing it directly.
  • It is illegal for the roofer to kickback the deductible and thereby absorb or “pay” the deductible.

Sadly, these are exactly the tricks shady roofing contractors and unknowing or unethical homeowners are pulling.  These roofers are not the type RoofBidders works with or recommends.  More importantly, they are not the type of roofers a homeowner should use.

Would you start a relationship with a lie?

Disreputable roofers lie and cheat their way into people homes.  They convince homeowners that the insurance company does not care, does not know, and that “everyone” does it.

The roofer, as the direct contractor (meaning the one actual doing the work), lies to the insurance company regarding you, the homeowner, paying the deductible.  They submit fraudulent paperwork saying that they collected the deductible, and charged you more than they actually did.

Simultaneously, you lie and commit fraud by signing fraudulent paperwork or intentionally omit the truth.  Both you and the roofer have committed insurance fraud. The felony-type fraud that can send you to jail.

So, how does RoofBidders put money in your pocket?

RoofBidders is a completely new concept leveraging highly sophisticated satellite technology. We can cost effectively do what previously was not only impractical but also very costly. Because of these advancements in technology, we can profitably operate and in turn share our profits.

Stay tuned to Thursday’s blog where we go into exactly how RoofBidders is different and you can save money, maybe put some in your pocket, avoid committing a crime, and stay out of jail!

Confused or want more information? Trying to understand the costs associated with replacing a roof?  Call, email, post to Facebook, or tweet to us.  No Fee, No Obligation, Just help for you.

Don’t want to talk to anyone and just want a quick, satellite photograph measurement to help estimate the cost for your roof?  Order the Quick Report

If you have a specific roof issue and can send us a photo via email, Facebook, or Twitter, we will do our best to advise you on the specific issue.


  1. Jenn-Reply
    April 18, 2020 at 09:20

    If you do all the work yourself, can you get the RCV amount also? Or if you hire multiple subcontractors to do the work for you at a lower cost than what insurance pays, can you get the RCV also? I am not a general contractor. Nor did we hire general contractors. I acted as the GC.

    ROOFBIDDERS COMMENT – Doubtful, but you can try. You have to provide full disclosure or you run the risk of unintentionally committing insurance fraud. Yet when you show them that you were able to get the work done for less than they estimated they will want to pay you what it cost, not the estimate. You would do better if you hired a GC who would rebate a percentage of their profit, which has nothing to do with the insurance claim, yet they would be able to secure the RCV and if they did a great job of controlling cost there would be ample profit, of which you could receive a part of. Hope it works out for you. God Bless.

  2. Bradley Meda-Reply
    May 1, 2020 at 04:47

    I have a roofer claiming I need to give him all funds including depreciation payment from insurance company because I cannot keep excess funds even though work was completed for way less than what insurance company disbursed to me. Seems like fraud from my roofer. Please advise if he should get excess funds or me.

    • E.J. Simonsen-Reply
      May 4, 2020 at 11:56

      It likely depends on your State and your contract. In Texas, if your contract with a roofer states they will do it for whatever the insurance company estimates then you owe the roofer the full estimate, even if it only costs them 50% of the estimate.

  3. May 27, 2020 at 18:40

    I’m having my roof replaced contractor is less of what insurance giving me. Do i keep the rest and fix other stuff on my home? Or do I need to return difference?

    • E.J. Simonsen-Reply
      June 3, 2020 at 19:28

      It depends on the State and insurance policy. In general, as long as you paid your deductible, the insurance company paid in full, and you complete the job for less as described, you can keep the rest. As long as the insurance company was not misled about the cost of the roof job then you should be able to enjoy the remaining money. Great job!

  4. David Partner-Reply
    June 19, 2020 at 08:57

    Roofer did the work for agreed amount (18500), insurance paid 100 percent. Roofer returned to my house and recovered more than 2500.00 worth of items AFTER receiving the FULL payment from the insurance company. I found this extremely unethical. Is it legal for roofers to return items for additional profit (in this case more than 2500 with of stuff) to “add” to the cost of the project? The new total for this project now exceeds 20K. Is this a call to the insurance company?

    • E.J. Simonsen-Reply
      June 19, 2020 at 18:59

      Roofers build in a certain amount of waste (10-20% average) to account for the need to cut and install materials around structures, such as a chimney. Your insurance company understand this and accounts for waste in the estimate. If the roofer over-ordered and returned the extra, nothing improper occurred. On the other hand, if the roofer lied by asking the insurer to pay supplemental monies to cover extra materials (or work) that he knew was not needed; planning all the while to return them for extra profit, that is wrong. We suggest you compare the $18,500 estimate to the $20,000+ estimate and call the roofer to hear his explanation. It would be best to work out the issue with the roofer before calling the insurance company. The one bright spot is that even if the roofer did defraud your insurance company (which you would need to report) the higher bill does not impact you or your policy. Insurers are not allowed to raise rates for claims due to Acts of God. Hope it gets cleared up.

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