Is it Legal for a Roofer to Pay for a Deductible?

by Richard Morgan ; Updated July 27, 2017
State laws are strict regarding roofing contractor behavior.

When hailstorms strike, homeowners often discover damage to their roofs. In order to repair that damage, the homeowners turn to roofing professionals. While many roofing contractors conduct themselves reputably, some contractors are not so scrupulous. A dishonest roofing contractor may offer to pay the cost of the deductible on the policy, but in reality, doing so requires the contractor to submit false figures on the claim.

Deductible

In an insurance policy, a deductible is the amount of money a policyholder pays before the insurance company begins paying out the remainder of the claim. In many cases, if a consumer carries a high deductible, it reduces the amount of the insurance premiums. While it might seem like a good idea in order to lower monthly premium costs, it might prove costly in the event a policyholder files a claim.

State Laws

In some states, such as Texas, a roofer paying for a deductible is illegal. Under the terms set forth in the Business and Commerce Code, a roofer selling services or goods commits fraud if he pays any amount of the deductible. It is also illegal in some states for roofers to offer rebates when fulfilling the terms of their contracts.

Claim Denial

If the state statutes render the roofer paying for deductibles illegal, such as found in Minnesota state law, the law also provides protection for the insurance company. Should the insurer determine the roofer is engaged in illegal business practices, the insurer does not have to consider the estimate provided by the roofer. If there are several companies preparing estimates and some of them are offering the homeowners a “special discount” that takes care of the deductible, the insurance company will not include those companies when examining estimates and determining the outcome of the claim.

Illegal Discounts

Offering special discounts and rebates from a roofer is illegal in some states. This practice leads to states introducing various bills designed to cut down on instances of illegal roofing contractor practices. In Illinois, for example, both House and Senate that provided actual financial penalties for roofing contractors engaging in illegal activities passed a bill.

Unscrupulous Practices

Some roofing contractors engage in other unscrupulous practices. For example, a contractor might show up at a homeowner’s house and make unsupported verbal promises. The homeowner, believing the deal offered by the roofing contractor to actually be beneficial, agrees to use the contractor’s services. However, without having the terms of the agreement spelled out in a written contractor, the homeowner does not have legal grounds to sue for damages if the contractor does not fulfill the terms of the verbal contract.

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