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Jo C.
Jo C., Barrister
Category: Law
Satisfied Customers: 71142
Experience:  Over 5 years in practice
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As a contractor reinstating a property following damage covered

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As a contractor reinstating a property following damage covered by insurance, I invoice the insurance company direct and receive payment from them less the excess. I am quite happy to waive this excess charge for the policy holder but I am told by my franchisor that it is a legal requirement that they pay me this excess. Surely I can decide weather I waive this charge or not is this right?
Thank you for your question. My name is ***** ***** I will try to help with this.
Have you told the insurance company about the fact that you are going to waive the excess?
Customer: replied 3 years ago.

Hi Jo

No I have never told the insurance company that I will waive the excess.

When offering our services to the policy holder we ask them to sign our mandate for data protection services this mandate also says that they agree to me agreeing to a settlement offer and agree to me appointing my contractors to carry out the work. Our final invoice is sent to the insurance company who normally settle with me direct but less any excess amounts. This they say we can collect from the policy holder, however on most occasions I am quite happy to waive this excess as normally it is quite insignificant in comparison to the overall value of the claim. I always thought if I did not need the excess I had the option not to collect it. I am part of a Franchise and the franchisor is saying it is a legal requirement for the policy holder to make this payment, however I think this is because the franchisor is only trying to get its royalty payment from this and is just saying it is a legal requirement .

I am due in court this morning but I can look at this at about 10.30 if that's ok?
Customer: replied 3 years ago.

Thats fine thankyou. It has occurred to me that if the insurance company pay me less the excess then they have contra'd this amount and effectively have been paid the excess.

Thanks. I will come back.
Provided the insurance company agree that you can discount this to the policyholder (which is in effect what you are doing) there is no problem.
It must be disclosed to the insurance company otherwise there is an element of potential fraud here because the policyholder is bound by contract to pay the 1st part (the excess) of any claim.
For you to agree to discount it by not charging the excess to the policyholder is treating the insurance company unfairly.
The franchisor is correct in what they are saying.
However you are quite right, it is your decision as to whether you charge this or not but it is not your decision who it applies to unless the insurance company agree.
I'm sorry if this answer is unfavourable.
Can I clarify anything for you?
Jo C. and other Law Specialists are ready to help you
Customer: replied 3 years ago.

Thank you very much for your answer, however I still do not quite understand how the insurance company is being treated unfairly as they have collected the excess by deducting it from my settlement payment. I would think at that stage its up to me if I ask the policy holder to make up this shortfall or not.

I am normally trying to help the insurance companies policy holders who have very little money and really appreciate this gesture of goodwill.