A new Texas law prohibits contractors and roofers from waiving insurance deductibles.
“This new law will help further protect consumers,” Texas’ insurance commissioner, Kent Sullivan, said in a statement. “Roofers who waive deductibles are cutting corners. Take your business elsewhere.”
The Texas Department of Insurance (“TDI”) explained that after a major storm, contractors – including some scam artists – are quick to arrive on the scene. The TDI said that, “[t]his leads to shoddy repairs, fake contracts, and other problems.” The TDI has created a special fraud unit that meets with local officials after a disaster and explains steps they can take to protect residents from contractor scams.
According to the TDI, one selling point bad contractors often use is offering to waive or absorb the homeowner’s deductible. “The contractor then cuts corners, uses lower quality products, or inflates the bill sent to the insurance company to cover the difference,” the TDI said.
Now, the TDI added, it is illegal for contractors or roofers to offer to waive a deductible or promise a rebate for all or part of a deductible. Under the new law effective September 1, violators could get up to a $2,000 fine and up to six months in jail.
If a contractor offers to waive a deductible, the TDI said, consumers can report it to the Texas Attorney General’s Consumer Protection Hotline at 1-800-621-0508.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].