QUESTION
Can a general contractor add interests to a insurance deductible?
Asked on Oct 18th, 2014 on Civil Litigation - Georgia
More details to this question:
A homeowner pipes burst due to the weather. Home owner insurance sometime require a deductible of $1000. If the deductible is not paid on time to contractor, could the contractor charge interests on the $1000? Also shouldn't the contractor not start the work until the $1000 deductible was received?
1 ANSWER
I assume that the contractor's contract is with the homeowner, not the insurance company. If so, the homeowner's policy (i.e. the homeowner's agreement with the insurance company) has nothing to do with the transaction between the contractor and the homeowner. If the homeowner does not pay the contractor on time, the contractor would generally be able to charge interest on the amount due (and I assume the homeowner/contractor agreement so provides.) As for whether the contractor should delay work until he receives the $1,000, that might be the prudent thing to do but, unless the contractor's contract with the homeowner requires him to delay, the contractor is not legally obligated to do so.
Answered on Oct 20th, 2014 at 2:25 PM