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Old 06-11-2011, 11:34 PM   #1
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Ethical question

My insurance company agreed to pay for the full amount of my leak damage, around $5K. In theory, I could have the trailer repaired for free and have like-new trailer with a re-done roof, and no worry about winter rains in 2011.

My wife, however, wants to sell the trailer as-is without the repair (we will give full disclosure to the buyer, who is a trailer RV repair guy) add the proceeds to the insurance money, and buy a new or slightly-used, 2010-2012 model of a slightly larger 18-foot trailer.

I know the insurance company probably doesn't care, and this practice is probably common. If the insurance wanted to prevent it, they'd probably pay the repair shop directly. But does this seem okay and ethical?

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Old 06-11-2011, 11:43 PM   #2
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I can't see where there is anyting unethical about taking the Insurance Settlement and buying another Rig.

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Old 06-11-2011, 11:46 PM   #3
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I would think what you are considering could possibly fall in the category of "Insurance Fraud" by submitting a $5k claim to the insurance company for repair work that wasn't performed.

Personally, I wouldn't do it, but it's your call.

Good luck
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Old 06-12-2011, 05:24 AM   #4
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There's no problem. The insurance paid you for your loss, which is either a repair or the difference in the reduced value of your trailer.

Disclosing the leak and damage to buyers would be ethical.
Adios, Dirk - '84 Real Lite Truck Camper, '86 Wilderness Cimarron TT, previously 4 years as a fulltimer in a '07 DSDP

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Old 06-12-2011, 05:50 AM   #5
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One caveat, if you have a lien holder they would expect (require) the repairs be made.
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Old 06-12-2011, 08:36 AM   #6
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I think that leagal advice, Which is what you are asking for, from an online forum is worth exactly what you pay for it ($0.00) and your question needs a professional answer.

Also, This I do know, Lawyers like to protect their "Turf" same as most everyone else, and giving legal advice is THEIR TURF.

My normal line is that I can give informaiton, even links to specific laws, but I can not give advice.. In this case however.. I can't even give information. Never researched it.

I do know I have taken the check from the insurance company and then done the work myself, Pocketing the difference.. But that is legit.. I mean I deserve to be paid for my skill and time (And yes, That job was, in fact, something I used to do for a living so I really am qualified to do the work)
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Old 06-12-2011, 08:53 AM   #7
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Sitting Across the Table from a Lawyer...

Originally Posted by Elkhartjim View Post
One caveat, if you have a lien holder they would expect (require) the repairs be made.
True, says the Esq suffixed one. But, in this case, the insurer would've been required to pay you and the lienholder jointly, as a protection.

In this case, what you're proposing meets both legal and ethical tests for the atty's state...

For legal reasons, I can neither confirm nor deny that said atty is DW...
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Old 06-12-2011, 09:18 AM   #8
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Sounds like someone is gettin' a new rig
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Old 06-12-2011, 09:38 AM   #9
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No, no, no. You don't need to worry about the insurance company unless like stated above there is a lien on it. The insurance company do not care what you do with the money. I've done this many times. Here is how it works;

They could total the unit in which you will either need to give them the title or buy it back meaning you get less money and a salvage title. It does not sound like the case here.

Or you can get the money and do what you wish. They do not care if you fix it or not. They have the vin number of the unit so it is in their system. It is in a system so all insurance companies can see it. This claim is done and can not be issued again. We are talking about water here. Insurance companies are scared of it. Reason is the damage can not really be seen unless of course you had the whole thing stripped down until you found good stuff. I don't think this is the case as well. They are happy you took the settlement and in most cases write a check on the spot hoping you'll cash it an hour ago if you get my griff. Once you do they are out of it.

If you however feel better getting a lawyer and using most of your money up that is fine. I have 1000% been through this and I know. I had a company truck of mine, my 62 corvair van and a pop up go through similar issues.

Insurance fraud, no absolutely not. Fraud comes in if you had a buddy of yours that worked on these things tell the insurance company there is more damage then there really is and they are taking his word for it instead of sending their own adjuster. In any case it's kind of their fault trying to save a buck by going with the shops estimate. Your paying for the insurance so use it. Yes that part is fraud.

Good luck and let us know what you decide...
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Old 06-12-2011, 11:10 AM   #10
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The insurance company is paying out your loss, how you choose to spend it is your business. I like your wife's idea, major water damage will just create headaches later on and the refurbished trailer will be worth little when time to upgrade.
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Old 06-12-2011, 11:24 AM   #11
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I worked for the State Farm auto claim department for 30 years.

You can choose to take the money and not repair the damage. You should disclose this to your company. They will make a "prior damage" note on the file for future reference, should you make another claim, with them, on the same RV. There is nothing fraudulant about this. If there is a lien on the RV, however, the insurance company may be REQUIRED to include the lienholder on the payment. It is then between you and the lienholder as to how that money gets distributed. If the rig is still worth a lot more than you owe, even damaged, they may just endorse it over to you. If the damage reduces the value below the lien amount, they may insist that you endorse it over to them.

I suspect if you're upfront with the lienholder, and your intentions to purchase another rig, and another loan, you'll be able to work it out, regardless.

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