When a homeowner receives an insurance check for damage to their home and refuses to pay their contractor, it is probably not insurance fraud in New York. The specific crime of insurance fraud relates to defrauding the insurance company.
A homeowner has the option as to whether they will repair their home or not. The insurance payment is actually for the loss in value or for the cost of repairs. If the homeowner wants to take a vacation or invest the money instead of repairing their home, they are free to do so.
This does not mean that the contractor has no options. You could file a civil lawsuit against the homeowner, and in some cases you may be able to place a lien on their home. As far as criminal charges go, non-payment is usually treated as a civil business dispute. However, you may be able to press criminal charges if the homeowner committed some sort of fraudulent act against you.