Roof insurance fraud has become a common practice in Texas, despite the explicit laws against fraudulent activities.
In 2021, the Texas Department of Insurance (TDI) reported the highest number of fraud cases since 2017, including roof insurance fraud.
There are Texas laws that require homeowners to pay their entire insurance deductible when contracting a roofer to repair or replace their roofs. However, disreputable roofers take advantage of that and waive deductibles to get more clients, which is against the law.
How Disreputable Roofers Get Away with a Roof Insurance Scam in Texas
Whenever a storm is approaching, don’t feel surprised to see some roofing companies coming to your doorstep to market their roofing services. You’ll hear promises like “free roofing services with no deductibles.” However, that’s roof insurance fraud in Texas.
If a roofer claims that they will cover your deductible and that you won’t use any money out of your pocket, consider that fraud. While such roofers won’t tell you how to recover that money, the truth is that they will defraud your insurance company of the amount.
So, how can a disreputable roofer defraud your insurance company?
In most cases, such roofers give an estimate higher than the repair cost of a damaged roof. They then use the extra money paid by an insurance firm to cover your deductible. Some may also offer credits or rebates in your deductible, which is still illegal in Texas.
Most roofing contractors will try getting away with such fraudulent activities by treating the deductible as an advertising expense. For instance, they can ask you to install their billboard in your front yard for, let’s say, two weeks to waive your deductible.
The Deductible Law Against Roof Fraud in Texas
An insurance deductible refers to the amount of money you must pay before your insurance company checks in to cover your roof’s repair or replacement costs. In other words, it’s a strategy insurance companies use to share risks with policyholders.
As a homeowner in Texas, it’s illegal not to pay deductibles when repairing or replacing your roofing as it increases the insurance costs. A roofer that doesn’t collect deductibles will always bill insurance companies for the extra costs that policyholders should pay.
The first time the State of Texas declared that failing to pay deductibles is illegal was in 1989. However, the insurance deductible payments laws were vague, and disreputable roofers took advantage of that. Roofers could waive deductibles to win more clients.
The roofing contractors would provide false documentation or an invoice stating that the total repair cost covered the homeowner’s deductibles. Such actions negatively affected many insurance companies, constituting insurance fraud in Texas.
While waiving deductibles has been illegal in Texas since 1989, the legal authorities did little to enforce this issue until 2019, when Texas reviewed the laws to curb insurance roofing scams. That’s when the Texas House Bill 2102 (HB2102) came into effect.
About the HB2102 and Roofing Company Insurance Scam
Roofers that waive insurance deductibles have lured many homeowners into signing contracts. With the increasing unethical practices in the roofing industry, Texas reviewed the roof insurance laws to minimize roofing contractor scams.
In 2019, the Texas States passed Texas House Bill 2102 (HB2102) to curb roof insurance fraud cases in the state. Through HB2102, the Texas legislation team has implemented a new level of scrutiny to prohibit unprofessional roofers from waiving deductibles.
HB2102 requires all the homeowners to pay their roof repair or replacement deductibles to roofing contractors. That means the policyholder must pay their deductibles in full before requesting any money from the insurance company.
You may be asking yourself, “how will my insurance company know you’ve paid deductibles?” Your insurance may request proof of payment, whether receipts or bank statements. Also, you may provide a money order receipt or your credit card statement as proof.
With the new law, you can quickly distinguish reputable roofers from the disreputable ones. It protects you from fraudulent roofers who can cause further roof damage and multiple costly repairs. Try to avoid any roofer that waives the deductibles.
The HB2102 Texas law is also a win for reliable and reputable roofing contractors, like our team at Roof Master. That is because it punishes roofing contractors who waive or don’t collect deductibles from homeowners. For that reason, consider hiring roofers that ask you to pay deductibles.
There are many provisions in the HB2102 that you should know. A roofing contractor commits an offense against the HB2102 law when they:
- Pay, waive, absorb, or decline to collect or charge a specific amount of the homeowner’s deductibles during roof repairs or replacement
- Provide a credit or rebate for the roofing repair or replacement service that offsets part or the entire amount to be paid by the homeowner as a deductible
- Assist the homeowner in avoiding monetary payment of required insurance deductibles in any other manner
Legal Consequences of Insurance Roofing Scams
What happens if you don’t pay deductibles for roofing repair or replacement projects?
Well, there are many consequences for not complying with the HB2102 laws. As a homeowner, you may think you are not committing a crime when the contractor sends the paperwork to your insurance company. However, that’s where you go wrong.
The insurance fraud law applies to both the roofing contractor and homeowner. If the roofer waives, rebates, credits, or pays for deductibles on a homeowner’s behalf or assists the homeowner in avoiding paying deductibles, both parties will face the law.
If the state of Texas catches a roofing contractor or homeowner violating the deductible laws, both parties can pay fines of up to $2,000 or spend up to six months in jail. If you can’t pay deductibles, enroll in your insurer’s payment plan to avoid being implicated.
Roof Master Condemns Roof Insurance Fraud
As one of Texas’s most reputable roofing companies, Roof Master doesn’t participate in insurance fraud. We lead the way in protecting homeowners from roofers who commit roof fraud. Our experts understand all the provisions in HB2101.
Roof Master & Construction has never participated in roof insurance fraud in all its years of service. We always encourage all our clients in Lubbock and the surrounding areas to pay their deductibles in full before engaging their insurers for roof repairs.
Contact us today for free roof damage assessment and affordable repair services.