No Really, It's Illegal To Waive A Deductible. Like For Real!

Due to frequent hail storms and a lack of oversight, Texas homeowners have to contend with an abundance of fraudulent roofers. A new law is set to close a loophole that has plagued unsuspecting homeowners for years, but now the time has come to decide whether or not this law is an overdue correction or just a retread? In this brief article, we will discuss the passing of the Payment of Insurance Deductible bill and what it means for roofers in The Lone Star State. Consult with a roofing attorney in Texas for questions regarding the laws of your state.

Waiving Deductibles

Yes, the Texas roofing industry has had a major change!

A new state law designed to protect hailstorm victims from scamming roofers means more out-of-pocket roofing costs for many homeowners and this should thrill you! This will limit how scamming roofers give this industry a bad name.

The new law Governor Abbot signed on June 14, 2019 and went into effect Sept 1, 2019, seeks to end the mentality in the unregulated Texas roofing industry that can best be summed up this way: You scratch my back, I'll scratch yours.

The bill requires a homeowner to pay an insurance deductible in full, as already required by law. Sounds obvious enough. In fact, this is the third time this particular state law has been rewritten to require deductibles payment. This ignored provision became state law 30 years ago.

That's proof right there that few pay attention to the existing law.

To clarify what this means, homeowners will be required to pay (depending on your deductible) $1,000, $2,000 or more for a new roof with insurance and a roofer can not pick up the charge.

How Is This A Scam Though?

The scam would go like this: roofers would promise free roof repair or replacement to homeowners and inform them that their deductibles will be covered. As a result, homeowners would fail to pay their insurance deductibles and end up accidentally committing insurance fraud. This scam is harmful to not only homeowners, but also honest roofers that moral will not compete with their offers of free roof repair. While the above practice has been illegal for decades in Texas, the previous law was too vague to have any teeth.

But wait ... this is a victimless crime and the burden lays on the roofer, right?

Nope because insurance fraud is fraud, even if nobody is prosecuted. The new law allows the insurance company to demand access to the roofer's bank account to see if the transaction happened. If it didn't and the claim was paid, everyone is going to be prosecuted.

Another benefit for consumers: Knowing that deductibles must be paid and then hearing a sales pitch from a roofing company that offers to bypass the law is a red flag. What other corners do they cut?

Payment of Insurance Deductible

The Payment of Insurance Deductible bill, H.B. 2102, states: “It is a violation of Texas law for a person or business paid wholly or partly from proceeds of a property insurance claim to knowingly allow the policyholder to fail to pay, or assist the policyholder’s failure to pay, the applicable deductible.”

Essentially, roofers can now be effectively prosecuted for waiving deductibles. A roofer caught waiving deductibles can be charged with a Class B misdemeanor, sentenced to jail for 180 days, and fined up to $2,000. Homeowners will now have to pay more out of pocket for roof work, but they will no longer be penalized for being duped by fraudulent roofers.

Proof required by the insurance company can include a canceled check, money order receipt, credit card statement or copy of an installment plan contract.

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