Am I Committing Insurance Fraud with my Roof Repair?

The Lie Roofers Tell You

Storm season is approaching, and with it comes roof damage. When this inevitably happens, many roofers will tell you they can replace your roof for free without you having to pay a deductible. However, in the state of Texas, that is insurance fraud.

Understand What They’re Doing

In the state of Texas, it is illegal to not pay your deductible for a roof repair or replacement. It drives up the cost of insurance and the cost of the roof. By not collecting the deductible from you, the roofer is tacking it on in the back-end by billing the insurance company. Many roofers will try to get away with this by saying the deductible is an advertising expense. They claim that if you let them put a sign in your yard for two weeks, a deductible can be waived. That is not the case, and it is insurance fraud.

It Comes Down on Both of You

What that roofer is not telling you is that in addition to the fact that it is fraud for you not to pay your deductible, you are both actually committing insurance fraud. If you get caught by the state of Texas, not only does the roofing company get fined for that, but you can personally get fined up to $2,000 or up to six months in jail.

State Law: H.B. No. 2102

This is a relatively new law. Part of the reason for this is to curtail the rising costs of roof repairs in Texas. The law went into effect on September 1, 2019 due to so many roofing companies not charging deductibles. They were raising the costs of the roofs and billing the insurance carrier on the back-end.

The Insurance Pool

Insurance is a pool. Every time a claim is paid out of this pool, even though it’s not your claim per se, it affects the entire pool. Everyone’s rates go up based on the number of claims out there. So, if you have a roofer that is saying you have to pay your deductible, he is most likely a very reputable roofer and is someone to consider using.

Tips from TDI

The Texas Department of Insurance has provided the following tips to avoid contractor fraud:

• 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 up front and don’t make a final payment until the job is done.
• Never sign a contract with blanks on it.

Hanby Says

Again, not paying your deductible for your roof repair or replacement is considered insurance fraud. If you have any other questions, we would love to help!