You’ve probably heard it before: “I’ll eat your deductible” or “I’ll pay your deductible.” On the surface, it sounds like a great deal. Some contractors even promise to put money back in your pocket. But have you ever stopped to wonder how they’re actually pulling this off? If it sounds too good to be true, that’s because it often is. What these contractors aren’t telling you is that this practice can lead to serious legal trouble, and you could unknowingly be part of it.
What’s really happening behind the scenes? These contractors are likely engaging in insurance fraud, which is a federal offense. They might provide a false invoice to the insurance company, claiming they’ve done work for the full amount of the settlement. Meanwhile, they charge you a lower amount or claim to waive your deductible entirely. This discrepancy is illegal and could have severe consequences for everyone involved. Legislation and insurance companies across the U.S. are cracking down on these practices, and those caught can face fines, lawsuits, and even jail time.
Think this won’t affect you? Think again. Even if you’re unaware, allowing a contractor to falsify invoices or manipulate claims on your behalf can make you a willing participant in insurance fraud. Imagine finding out that your name is tied to fraudulent activity because a contractor cut corners behind your back. Cases like the infamous Webb Roofing Scam illustrate just how seriously these situations are taken, with penalties that can include decades in prison. Insurance companies are ramping up their investigations, and the laws are changing fast.
The only legitimate way for a contractor to handle your deductible is through proper invoicing and transparency. Recoverable depreciation, or the settlement funds left after initial payments, must be accounted for honestly. If someone claims to “eat” your deductible, they are likely hiding something. Ethical contractors will explain the costs and work directly with you and your insurance company to ensure everything is above board. A transparent process might not sound as enticing as “free money,” but it will protect you from potential legal and financial ruin.
Next time someone says they’ll pay your deductible, think twice. What might seem like a harmless offer could drag you into a mess of fraudulent activity and legal consequences. Protect yourself by choosing contractors who value honesty and follow the rules. Your peace of mind and financial stability are worth far more than any shortcuts or too-good-to-be-true deals.