My home was damaged by hail. Contractor said he would refund the deductible, wrote one contract and then made change order for less the deductible. I signed the contracts, but provided no down payment. Did not seem right...so doing/did some research. Can I get out of contract because everywhere I look it says this is insurance fraud. Don't want to work with crooks or break the law myself.
Personal Injury Lawyer
You need to review the contract you signed to see what your options are regarding the right to cancel the contract. Consider talking with a local attorney before doing anything to get out of the contract.
DISCLAIMER: David J. McCormick is licensed to practice law in the State of Wisconsin and this answer is being provided for informational purposes only because the laws of your jurisdiction may differ. This answer based on general legal principles and is not intended for the purpose of providing specific legal advice or opinions. Under no circumstances does this answer constitute the establishment of an attorney-client relationship.
Construction / Development Lawyer
The "easiest" way to get out of a contract consumer contract in Ohio (believe me, there are few easy ways) is to rescind the contract.
People believe that they always have some magical 3 days to cancel a contract in Ohio. Well, surprisingly, here is the one case that you probably do have that right. In most hail damage cases I have seen, the sale is a "Home Solicitation Sale," meaning, essentially, that the contractor came to your house, then signed the contract with you there (it is a pretty complicated law, but that is the basic principle.
If your contract IS a "Home Solicitation Sale," you have until midnight on the third day AFTER the day that you signed the contract, provided that they gave you written notice of that right to cancel on that day. If they didn't give you proper notice, your 3 days doesn't start to run until after they give the notice to you, meaning, even if it is more than 3 days since you signed the contract, if they didn't give you proper notice, you can probably still cancel. HAVING SAID THIS, DON'T DELAY, CONTACT A LAWER NOW TO ASSURE THAT YOU HAVE RIGHT TO CANCEL.
This law is very technical. I HIGHLY recommend that you contact an attorney to help you with this.
The Home Solicitation Sales Act is contained the Consumer Sales Practices Act, which is located in Ohio Revised Code Chapter 1345, which begins at ORC 1345.01, but the part specific to Home Solicitations is in Ohio Revised Code Sections 1345.21 through 1345.28. You have to read the whole thing together, and then also read the rest of the Consumer Sales Practices Act.
Even if they have given you the proper notice, you can probably get out of the contract, but only because you are going to have your attorney send them a strongly worded letter. Otherwise you are likely to be stuck.
You are right, it is insurance fraud. They may or may not be "crooks" as much as overzealous sales people, not thinking about why what they are doing is wrong, but of course it is because they are really saying that they are happy to do the work for the lesser amount (the contract price, less the deductible), but they are charging the insurance company the full amount. For some, it is a difficult concept to grasp. I wasn't there, so I don't really know whether is was just someone who was badly informed, a green sales person believing that he is doing you a favor or he or she actually understood the fraud.
If you otherwise thing that they might be good people and you aren't trying to get out of the contract just to get out of it (perhaps you heard something bad about them, or a friend has a friend who will give you a better deal, you want to get out of it now because your trust was broken by this sleight of hand attempt to get you to sign a contract, or some other reason), there may be a way to do this right.
If you still trust them to do a good job, the insurance company should know the true price, you can show them the change order reducing the price. THAT is the number that they should use to calculate their payment to you. You can then take that amount, add your deductible to it and the contractor gets the right amount of money, you pay the right amount of money and so does your insurer. That may be a big leap, though, as you just may not trust them.
Talk to a qualified attorney before you decide what you should do.
Under contract law, both parties must follow through with their parts of the contract. If either side fails to perform, they are generally considered in breach affording the other party an opportunity to the cancel his/her/its remaining obligations under the contract. Now, if the contract called for committing illegal activities there is, essentially, a valid contract still in existence, presuming the formalities are met, but, it will likely be held unenforceable.