Deductibles…and why There’s No Such Thing as a Free Roof
We always get questions about deductibles. How high a deductible you should have is a matter of personal choice that should be carefully evaluated with your insurance agent. While the idea of carrying a higher deductible to save money on policy premiums may sound very enticing, remember that if you need to file a claim you will have a lot more out of pocket expense to cover. For instance, if your roof incurs $3,000 of damage in a hailstorm and your deductible is $5,000, you will pay for the entire $3,000 repair out of your pocket. You will need to weigh the likelihood of a claim occurring and your provisions for funding emergency repairs versus the savings on monthly premiums.
However, beware of any roofing contractor who offers to waive your insurance deductible on a roof repair or replacement. Even though it’s been improper to waive a deductible for a roofing claim in Texas since 1989, the statute was poorly worded so it became commonplace for contractors to ignore this and promise a “free” roof for those filing an insurance claim. Contractors who abided by the spirit of the law and refused to waive deductibles could not complete with these practices. Additionally, consumers were unknowingly committing insurance fraud by not abiding by the statute.
Because of House Bill 2102 just passed in the Texas Legislature, the law now clearly states that deductibles must be paid. Effective September 1st, a contractor who pays, waives, absorbs, rebates, credits, or otherwise declines to charge or collect a deductible from a customer is violating the law. Contracts must also contain the following disclosure statement indicating insurance deductibles must be paid: “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 seller of goods or services who reasonably expects 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.”
An insurance company can request “reasonable proof” that the deductible has been paid before making a replacement cost holdback payment. This legislation is a welcome relief in our opinion since it will protect consumers from illegal fraud schemes and ensure reputable contractors who collect deductibles are on a level playing field in competing for business. This is a step in the right direction to limit unscrupulous contractors and “storm chasers” from trying to take advantage of events to make a quick sale.
At Alliance Roofing, we always seek to offer our customers options to meet various budgets. We work with your insurance company if you are filing a claim, and will provide the same fair, legal, and high-quality roofing solutions we have been delivering for over 30 years.