Customer playing games trying to get a cut off an insurance change order payment.
1 reply
Dec 20, 2019
It can be hard to verify what, exactly, a customer is receiving from their insurance company. Ultimately, unless the contractor is directly involved in the communications with the insurer, and if the owner isn't being transparent about what amounts are being paid to them, I'm not sure how a contractor might be able to suss that out. Of course, if the contract price isn't directly tied to the insurance payout, it might not matter all that much what a customer receives from insurance as long as they're paying what's owed under the contract.
But, if a customer isn't paying what's owed under the contract in attempt to pocket some of the insurance payout, a contractor doesn't have to sit idly by - there are a number of options that may be available to recover payment.
Payment recovery tools for dealing with an unreliable customer
If a customer is trying to avoid paying past invoices or trying to have you settle for partial payment, then sending a simple invoice reminder could be a good first step. Invoice reminders are just like they sound - they're a gentle reminder that payment is outstanding and should be paid soon. Sometimes, a little nudge is all that's needed to get things back on track.
Demand letters
Sending something more formal, like a payment demand letter, can be helpful, too. Demand letters let recipients know that the sender is serious about getting paid and willing to do what it takes to obtain payment. They'll generally include specific legal threats and set a deadline for making payment - so demand letters are more serious than just a payment reminder.
What's more, when a contractor thinks their customer is trying to pull one over on the insurance company, sending a payment demand letter to the insurer to notify them of the dispute might be helpful, too.
Notice of Intent to Lien
Mechanics lien claims are serious business, so the threat of a lien claim can be really effective to force a customer to pay you what you're owed. A Notice of Intent to Lien is a warning shot before a lien claim. It lets owners know that there's a serious dispute at hand and that if payment isn't made soon, then a lien claim will be filed on their property. Considering the seriousness of lien claims, owners can't afford to take the threat of lien lightly.
More on that here: What Is a Notice of Intent to Lien and Should You Send One?