Who do these new laws affect?
The first question you may have is, “do these new laws affect me?“. The short answer is YES! If you are a home/business owner in Texas, then this is information you need to know before you hire a roofing contractor.
These new laws aren’t entirely new. There was a pre-existing law that spelled out these same topics, but had some loopholes. The new laws were wanted by many roofing companies in Texas to keep the industry honest, and to hopefully eliminate the insurance fraud that was occurring in the less honorable parts of the industry.
In the background, insurance companies were also for these new laws, as it gave them more leverage to withhold and delay release of depreciation on RCV policies. Not to be spiteful to their insured customers, but to protect their business as it never was their responsibility to pay the insured’s deductible.
You, the property owner, may be asking, “how much is this going to cost me?”. Prior to any claim with the insurer, the policy holder needs to understand they will be liable for paying their deductible in full, whether it be with cash, or via project financing. If property owners get caught knowingly avoiding payment of deductible, now by Texas law, they can be held responsible for insurance fraud, along with the participating roofing company.
What are the new laws?
An obvious, and good, question to ask, and one we will address early in this article. The new laws, Texas HB 2102, have to do with insurance claims on roof repairs/replacements. Specifically, the payment of the deductible of which the homeowner is responsible for paying.
“Sec. 707.002. PAYMENT OF DEDUCTIBLE REQUIRED. A Person insured under a property insurance policy shall pay any deductible applicable to a first-party claim made under the policy.”
HB 2102, Section 1
“Sec. 707.004. REASONABLE PROOF OF PAYMENT. An insurer that issues a property insurance policy with replacement cost coverage may refuse to pay a claim for withheld recoverable depreciation or a replacement cost holdback under the policy until the insurer receives reasonable proof of payment by the policyholder of any deductible applicable to the claim. Reasonable proof of payment includes a canceled check, money order receipt, credit card statement, or copy of an executed installment plan contract or other financing arrangement that requires full payment of the deductible over time.”
HB 2102, Section 1
Now, with the new laws, the insurer can withhold coverage until proof of payment is provided for the deductible.
For many years, less honorable roofing contractors would employ the tactic of offering to pay the property owners deductible, if the owner would then choose to “do business with them”. A very attractive sounding prospect to hear from someone offering to fix your roof! Who doesn’t want to save hundreds, if not thousands, of dollars while solving the problem of needing a new roof??
“Texas law requires a person insured under a property insurance policy to pay any deductible applicable to a claim made under the policy. 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 insured person to fail to pay, or assist the insured person’s failure to pay, the applicable insurance deductible.”
HB 2102, Section 2
Essentially, due to the savvy tactics of those roofing contractors, some homeowners were getting “free roofs”.. The roofing company got the sale, and the insurance company ended up paying the homeowners deductible…
WHICH IS TEXTBOOK INSURANCE FRAUD.
What do home/business owners need to know?
If you are in need of roof repair/replacement, and your insurance will be covering the project, do not accept any offers of discounts, or bribes from roofing contractors. Especially, do NOT hire a roofing contractor who offers to pay your deductible or a portion of it. This is now a closely observed part of the Texas roofing industry by Texas law.
The only money saving tactic that is legal now on insurance claims, is to find good insurance with a forgiving deductible. If you find yourself talking to a roofing contractor claiming he can save you money on an insurance claim, be warned, he is liable to incur a Class B Misdemeanor and $2,000 fine, of which you may also be implicated, as the insured.
When did these new laws pass?
The new laws went into affect on June 14, 2019, when the governor of Texas officially signed off on it. These laws go into effect in September 1, 2019. The North Texas Roofing Contractors Association, seeking to clean up the industry, headed the charge in getting the new laws passed.
Where do you find out more info?
If you would like to see the official summary of the proceedings that took place to implement this new law(s), click the link below.
https://capitol.texas.gov/BillLookup/History.aspx?LegSess=86R&Bill=HB2102
Whyyyyyy?!
You may be thinking that it sounded pretty good the way it was before, what with homeowners getting, “free roofs”, and all. Understandable, who doesn’t want free things? Ask yourself though. If your roofing contractor is literally willing to commit insurance fraud in order to make the sale, wouldn’t he deceive you if it benefited him/her too?
How do you avoid hiring the wrong roofing contractor then?
With every roofing contractor claiming to be “honest, quality craftsman”, how do you find one that actually is honest, and performs a quality service?
You hire a roofing company like Craven Roofing & Construction, Inc..
The full service roofing company that connects you with a repairmen when you call, not a salesman. They find the problem your roof has, and fix it. While every roof is not always repairable, Craven Roofing doesn’t sell you a problem your roof doesn’t have. Above all, they don’t put you at risk of being held liable by your insurance company for insurance fraud.
Contact Craven Roofing, here.