Stop us if you’ve heard this one before…

If you’re a property owner who has experienced storm damage requiring full roof replacement you’ve likely encountered many ‘sales pitches’ from one of the many roofing contractors vying for your business. It goes something like this:

A hail storm hits, an army of roofing trolls descend on your neighborhood with the promise of quick service, and “Hey, I’ll pick up your deductible too!’


Why do some contractors do business this way?

Why are so many roofing contractors willing to break the law and put their customers, many times unknowingly, into a position of complicity in insurance fraud?

The answer is, finding creative ways to commit insurance fraud, also known as ‘eating deductibles’ has been common place in the state of Texas since the late 80’s and came about as the result of a loosely-worded statute passed around that same time that many roofing contractors essentially have ignored.

Property owners were duped into signing contracts with these deductible-eating contractors based on promises of a (*wink wink*) “free roof.” Then homeowners/policyholders were conned into committing insurance fraud when in submitting a request for Replacement Cost (RCV) hold-back monies, they conveniently failed to tell their insurance company that the deductible part of the claim had not been charged, usually at the direction of their “roofing contractor”

Why is this allowed to happen?

The fact is, it ins’t allowed to happen - it really is breaking the law to ‘eat’ deductibles. But with a lack of enforcement due to the sheer volume of violations - there are more violations than law agencies could possibly prosecute - and with no licensing requirements in the state of Texas for roofing contractors, it can be a losing battle, one where the property owner gets the short end of the stick with unscrupulous contractors taking advantage of unsuspecting property owners who don’t want to fork over what they legally owe.

It can also be a case that a property owner simply doesn’t have the cash to pay the deductible and the fly-by-night roofer isn’t equipped to offer payment options such as financing.

How does Bill 2102 seek to curb this illegal practice?

Texas House Bill 2102 establishes a Class B misdemeanor offense of 180 days in jail and a fine of up to $2000, for the business who sells services and knowingly submits or allows a claim to be submitted in violation of subsection c.*

Another key aspect of Bill 2102 is the Reasonable Proof of Payment provision, which outlines that an insurer may deny paying a claim until the insurer received “reasonable proof” that the deductible portion of payment has been made. “Reasonable Proof”, as set forth in the statute includes: “canceled check, money order under 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.” Tex. Ins. Code §707.004.*

So, in other words, if a contractor knowingly commits fraud with regard to the payment of the insured’s deductible, it’s a crime. It’s that simple.

*Source: Merlin Law Group

What does it mean for property owners?

At the end of the day, property owners are required in writing to be informed that not following through on their fiduciary responsibility of paying their policy deductible can result in prosecution under the Texas Insurance Codes. More importantly, the law is another step toward property owners not being ‘seduced’ into committing insurance fraud unknowingly.

Another win for property owners: Knowing that deductibles must be paid and then hearing a proposal from a roofing contractor that offers a “workaround” to the law is a huge warning sign. What other corners are they willing to cut? (Hint: the answer is almost always “a lot”)

Tips for Vetting and Hiring a Contractor

After all of this it’s safe to say you’ll want to take the time and effort to properly vet contractors so you identify a roofing partner that will perform quality workmanship with above board ethics. Here are some tactics to help you in your search:

1. Start the process before you need a contractor! Why add extra stress to the storm restoration experience than is necessary. If you’ve taken the time beforehand to find a company that matches your values, it’s one huge headache off your plate.

2. Make sure any contractor is fully insured. What does fully insured mean? They should carry
general liability insurance coverage of at least $1,000,000 for the specific trade of roofing.

Call the insurance provider to ensure the coverage is active.

3. Talk to other property owners who have used said contractor in the past. If a contractor is not

prepared to share any of this info, it’s a big red flag. What else are they hiding?

4. Avoid “storm chasers”. Choose a contractor who is local to your area. Go online and see if

they have a brick and mortar location. There’s nothing worse than finding out that your

contractor has left town once the work is complete because they’re on to the next storm in the

next part of the country.

To read more about the bill click here.

Schedule Your Roof Inspection Report Today

At Aspenmark Roofing and Solar, we’ve been proudly serving the Dallas/Fort Worth area for over 13 years. Let us inspect your home and conduct a comprehensive roof assessment.

Call 214-823-7663 or contact us online to request a
quote professional inspection today!