Good news, North Texas Homeowners! Texas has passed a new law that helps protect your property and your wallet from shady contractors. As of September 1, 2019, any Texas roofer or contractor who assists a Texas homeowner in avoiding payment of their required insurance deductible can be punished by law. While this was always the intention, Texas roofers and contractors have been exploiting a loophole in the old law since 1989 to make deductible payments an incentive or bonus to working with them. 

Previously, trustworthy contractors who refused to break the law couldn’t compete with these “deductible eaters.” Homeowners were lured into signing contracts with shady roofers with the promise of a “Free Roof!” This corner-cutting has caused thousands of Texas homeowners to accidentally commit insurance fraud by submitting a request to their insurance company for replacement costs without disclosing that the deductible portion of their cost had not been paid.

A Texas roofer or contractor is out of compliance with the new law if they pay, waive, absorb, rebate, credit, or otherwise declines to charge or collect a deductible. Going forward, the legal weight of penalty lies with the contractor if they are found to be in violation of the new law. With fines up to $2,000 and up to 6 months of jail time, the consequences will hopefully be enough of a deterrent to end this dishonest practice. 

While legal responsibility lies with the contractor, there are still significant consequences for homeowners who allow a Texas roofer or contractor to break this law on their behalf. Should a contractor lose their license over this law, any warranty for work done to a property would be void. 

Going forward, any contract that a homeowner enters into with a Texas roofer or contractor will contain required language explaining this new statute. Another big change that homeowners can expect is that insurance companies can require “reasonable proof” of deductible payment before writing a check to cover the cost of a new roof or a repair. 

To make sure that your home and your wallet are protected, here are some tips to help you avoid contractor fraud from the Texas Department of Insurance:

• Get written estimates on company letterhead with clear contact information.
• Get more than one bid to gauge which ones are too high or too good to be true.
• Check references and phone numbers.
• Beware of those who only have out-of-town references or solicit door to door.
• Don’t pay in full upfront and don’t make a final payment until the job is done.
• Never sign a contract with blanks on it.

This important change in legislation will both protect Texas consumers from illegal fraud schemes and ensure that trustworthy contractors who collect deductibles can be competitive in the marketplace. If you have any questions about how this new legislation might affect you, or if you need a quote from a North Texas roofer and contractor that you can trust, get in contact with us. We’re proud to protect your property and your wallet.