Is it Legal for a Roofer to Waive my Deductible?
We get this question all the time and understand how confusing this must be for homeowners. With countless roofers openly advertising that they will cover your deductible and so many people getting a “free” roof, this area can seem grey, until you research it.
At one time it was legal.
Insurance companies used to provide homeowners with the full amount of their claim in one payment (minus the homeowner’s deductible). The homeowner could then shop around for lower bids than what their Insurance Company paid them and could even decide if they wanted to complete the repairs!
Insurance has changed.
Most policies are no longer paid in one lump sum. Instead, they can be paid out in as many as 4 separate checks. The only way to get money from your insurance company now is for someone to bill them. Your Insurance Company may choose to release all the funds after ALL of the work is completed. They do this because they want you to complete the repairs to your home.
Don't leave $ behind.
Many times a homeowner will get their first check for their claim, say $8,000, but their insurance company holds back their last check (their depreciation) until the customer pays their deductible of $1,000. The customer finds a roofer to do their roof for the first check, so they can get out of paying their deductible. In this situation, the customer has left money “on the table”. Their insurance company will get to keep their depreciation of $4,000 and the customer will now get an $8,000 roof instead of a more durable $13,000 roof. If this was a car replacement, instead of a roof, it would be unlikely for anyone to be willing to settle for a cheaper car, but so often homeowners are willing to settle for a cheaper roof. Remember your roof is your home’s first line of defense against the elements – make sure it the best roof you can get!
When a contractor knowingly invoices the insurance company a higher amount (than what they contracted to the homeowner) with the sole intention of covering the homeowner’s deductible - that is considered insurance fraud. Even if a contractor offers a “discount” or “pays” the homeowner for marketing (such as leaving a sign in their yard) – that would require a 1099 and could be considered tax fraud and insurance fraud.
We want to protect our customers. We do this by providing you with a premium lifetime roof and by following all of the state's rules. This protects us and it protects you!
In Missouri, Senate Bill 101 states, “Under the act, contractors who perform roof or other residential exterior work are prohibited from offering to pay, in any monetary form, a homeowner’s insurance deductible as an incentive to encourage the homeowner to hire the contractor.”
In the state of Texas, the Better Business Bureau (BBB) released a report stating, “The BBB recommends that roofing contractors and consumers alike exercise caution in participating in such programs (waiving deductibles). These programs walk along a very fuzzy line of insurance fraud, and neither roofer nor consumer would want to be held liable for such serious allegations.”