Homeowners to pay full roof replacement deductible under new law

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North Texas homeowners can no longer take advantage of a “free roof” under a new law that goes into effect Sept. 1.

Under Texas House Bill 2102 approved in the most recent legislative session, roofing contractors who offer to waive a homeowner’s deductible on their property insurance policy could face jail time. 

The practice of waived deductibles by roofers became commonplace in North Texas, Zelle law firm attorney Steven Badger said. 

“It became an expectation in North Texas that if you had hail damage, the contractor would waive your deductible and you would get a free roof,” Badger said. 

Though frequent, the practice has been illegal in Texas since 1989. But “poorly written” law resulted in little enforcement, Badger said. 

HB 2102 requires roofers to include boldfaced language in their contracts stating that homeowners must pay the deductible under their property insurance policy. The law makes it a criminal offense for a roofing contractor to pay for, waive, absorb, rebate or offset an insurance deductible. An insured policyholder also violates the law if they knowingly submit or allow a claim with a waived or reduced deductible.

In July, the city of Frisco issued 522 residential roofing permits, according to the city’s building inspection report. 

President of Peak Roofing and Construction Jeff Riss said the law will be positive for his Frisco-based business. Riss said he hopes what he calls the “enforcement bill” will shake out storm chasers who hustle homeowners.

“There’s so much shadiness in our business,” Riss said. “We’re hoping this bill will cut some of that out.” 

But Frisco resident Michael Yamada said the law could result in repairs not getting done due to lack of affordability. 

“I’m scared as a homeowner,” Yamada said. “If I can’t pay to have it done, what happens when I don’t get it done and have more damage happen?”

Yamada said he fears his insurance provider would then not cover future replacements due to negligence.

Before HB 2102

In some instances, lack of enforcement of fully paying deductibles resulted in homeowners being implicated in insurance fraud, Badger said. 

In other instances, homeowners received inferior roof replacements—whether it was a half-done job or completed with cheap materials—and some contractors disappeared after waiving deductibles, Badger said. 

If homeowners received a botched roof replacement from a disreputable contractor, it led to more repairs over time, Riss said. He said he has replaced roofs three times in three years on several Frisco, Little Elm and McKinney homes due to hail damage on cheaply done work.

Additionally, Badger said roofing contractors who were trying to comply with the law sometimes lost business to “shady” contractors promising free roofs. 

Yamada said when he had his roof replaced, he and the roofer split the deductible, which enabled Yamada to get the necessary replacement. 

“It was a fantastic experience,” Yamada said. “I feel I got everything done that needed to get done.” 

Adjusting to the bill 

North Texas homeowners will have to adjust to the new norm, Riss said—especially if they are unable to afford their current deductibles. 

If Yamada had to pay the full deductible on a roof replacement, he said he would likely have to foot the bill on a credit card or take out a loan. 

“It makes it even harder, especially for those that don’t have the means to do either one of those [options],” he said.  

President of Town and Country Roofing Ralph Harris suggests homeowners contact their insurance providers and bargain for a lower deductible. Going from 2% to 1% or asking for a $1,000 or $2,000 deductible can make a big difference, he said.

“When we do have storms, people will be [better] able to afford a $1,000 or $2,000 deductible,” Harris said. 

Badger said Frisco homeowners should speak to their insurance provider about a lower fixed-dollar deductible since “fairly expensive” Frisco homes can have a deductible of several thousand dollars. 

A provision of the law states that an insurer may refuse to pay a claim for withheld replacement cost holdback until they receive “reasonable proof” of payment of the deductible by the policyholder. This can include canceled checks, money order receipts or credit card statements.

For those who are less able to afford their deductible, Badger said a copy of an executed installment plan contract or financing agreement for payment over time will work as well.

“We were mindful of that issue in drafting the legislation,” Badger said. 

Education

Both roofing presidents said they are rolling out educational campaigns about the new law and what homeowners can do to get a fair deductible.  

Karen Vermaire Fox, executive director of the North Texas Roofing Contractors Association, said homeowners need to know what they are responsible for. 

“Homeowners are going to have to be a little more particular,” Vermaire Fox said. “Hopefully the homes in Frisco are going to be more protected than they were before.”

Until all the disreputable roofing contractors are out of business, Harris said homeowners need to be as educated as possible come Sept. 1. 

“It’s all about educating the homeowners,” Harris said. “There’s always going to be those bad apples out there.”

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  1. These contractors aren’t just offsetting deductibles. They’re submitting fraudulent claims to insurance, saying they are performing work like AC repair that they are not performing and in some cases beyond their service offerings. My insurance company asked me if they performed all this work, I said no and had to pay some out of pocket.

  2. It isn’t a “free” roof after making insurance payments for many years without a single claim in our case about 25 years! With the rate we’ve been paying the insurance industry is by far way ahead financially than we have claims on a house we rent from the Lewisville ISD. We cannot “own” land in this country.

    • The good legislators who wrote and got this bill passed should have also have required the insurance companies to reduce the deductible. My homeowners insurance is out of sight and increases each year. This should have been a helpful financially to the insureds.

      • totally agree with you, I mean, really? they are telling us in our face to put payments in a credit card o loan? thats hilarious, so now is not just deductible, now we need to add loan/credits rates?that is a joke. What about enforcing insurance companies to waive deductibles? is just fare, at the end, home owners we are in the middle.

    • You got that right!!! More insurance, lawyer and contractor double talk. Insurance pays the same whether you pay a deductible or not. Just screwing the consumer as always.

  3. Linda Matthews

    The roofing company should be able to “advertise” their business in exchange for the deductible payment.

  4. This law will have far reaching negative impacts. As stated above, most people can’t afford the deductible for roof repairs. The deductible for my house is over $7k. I would have to take out a loan to pay that. With this restrictive law, what’s to keep my insurance company from raising that amount even higher?

    There’s a lot of things I love about this state. This is definitely not one of them.

    • exactly, now u have to ask for a loan to pay ur insurance? wow, like I mean ur paying insurance already, is the whole point of paying insurance, can u imagine? every hail storm ur roof gets hit, average twice a year maybe more, so, would now you gonna have to pay extra $7k plus whatever loan APR is, I mean this is ur home man, we talking about ur roof, where ur kids sleep, ur wife etc, should be easy for something that u are paying already monthly.

  5. not doing work and claiming you have is fraud

    A ROOFER CHOOSING TO absorb any or all of costs …again,,as long as the work claimed is the work paid for

    is none of the business of the government

    “hustlers” ??? said Peak

    what does that have to do with the legal aspects>>>>> none

    If your deductible is x amount …as long as that money is paid and the insurers get their money

    how is THAT an issus?

    your roof costs ( example) 10k you have a 1k deductible

    you pay the insurance co the 1k

    the roofer charges you 9k

    so they can get your business

    • WRONG…you pay the CONTRACTOR your deductible, the insurance co pays the homeowner the 9k, then the home owner pays that to the contractor.

      I am a roofing ctr in Austin. I was a catastrophe adjuster for yrs before starting my co. I am glad they passed this law. I don’t cover deductibles. I lost a job last week for that reason. oh well. If a roofer will cheat the insurance co…don’t you think they will cheat you too???

  6. the insurance commission in the State of Texas is not on the consumer side, otherwise there would have been some adjustments made on the deductibles for housing, most housing can only get 1% to 2% deductibles they should have made carriers lower deductibles but did not, I would like all the names of the people that voted in favor of this so I can vote them out, as should you. This is a horrible bill that will only cause more damage to housing, credit, affordability of North Texas housing. The people who voted this in, need to go. If I had my roof replaced I am smart to figure a scammer out, if someone isn’t then when the insurance carrier adjuster comes out and makes a recommendation they better listen or work with carrier. This bill is full of deceit.

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