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In 2019, Texas passed a bill designed to curb roofing contractor scams. Over the years, some homeowners have been lured into signing contracts with roofers that waive their insurance deductibles in exchange for a “free roof” or other free roof repairs. While this has been illegal since 1989, it’s rarely been enforced until now. Let’s take a closer look at how this new bill affects homeowners and roofers.
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About the Bill
The Texas House Bill 2102 claims that, “A person insured under a property insurance policy shall pay any deductible applicable to a first-party claim made under the policy. Therefore, any contractor that provides a credit, rebate, or offers to waive or absorb the amount of the homeowner’s insurance deductible will be charged with a crime. It’s also a crime for contractors to be “paid wholly or partly from the proceeds of a property insurance claim to knowingly allow the insured person to fail to pay, or assist the insured person’s failure to pay the applicable insurance deductible.”
It used to be quite common for contractors to waive an insurance deductible to help repair or replace a roof after storm damage. In Houston, Texas, where hurricane season often causes wind damage and hail damage to most homes, a lower roof replacement cost is certainly appealing. This practice allowed contractors to cut corners and use cheaper asphalt shingles and other roofing materials at a lower price, defrauding insurance companies for more money and allowing homeowners to submit requests for higher amounts to insurance adjusters. Under the new law, contractors who violate this bill face a potential $2,000 fine and six months in jail.
How it Affects Homeowners
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While this state law does require you to pay your entire insurance deductible, it also helps separate more reputable contractors and roofing companies from the shady ones. This bill also requires that the policyholder pay their deductible in full before receiving any money from the insurance company. You may have to offer proof of payment with a bank statement or receipts. If you are unable to pay for a roof replacement deductible, you can enroll in a payment plan with your insurance company.
Bottom line: this law is designed to protect you from fraudulent contractors which could lead to multiple costly repairs and further roof damage.
How It Affects Contractors
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While this new law may be bad news for contractors looking to cheat the system, it’s a win for the legit, reputable roofers dedicated to their work and the insurers. Now, contractors must disclose in contracts that insurance deductibles are fully paid, in addition to proof of payment requests from insurance companies. This law is a win-win for both parties and helps responsible roofing contractors stay competitive and maintain a strong reputation.
Texas House Bill 2102: In Summary
Although offering rebates, credits, or waiving insurance deductibles in exchange for free roofing services has always been illegal, it was never strictly enforced. The new Texas House Bill 2102 not only cracks down on these roofing scams and prevents homeowners from unknowingly committing insurance fraud, but it levels the playing field for businesses. More reputable contractors will be able to solely focus on their workmanship and won’t have to worry about losing business to criminal ones.