Texas approved two new bills pertaining to property damage insurance claims affecting both homeowners and contractors. Texas House Bills 2102 and 2103 went into effect on September 1, 2019. Here’s what you should know as a homeowner:
Texas House Bill 2102:
Avoid any contractor claiming they will pay for your deductible in any way, under THB 2102 this is now illegal. Many “fly-by-night” companies will flood affected areas after a hail storm and offer to waive, credit, or assist in anyway to help the homeowner avoid paying their deductible. This ends up negatively impacting homeowners in the long run. Commonly, this is not the case with more reputable companies who are aware of the consequences and abide by the rules. This new law creates a Class B misdemeanor offense of 180 days in jail and a fine up to $2,000 for a violating contractor and even the policyholder who is in connection with, and knowingly submits the first party claim. Usually these companies use a more pressured sales approach to get the homeowner to sign a contract as soon as possible instead of an informative and educative approach a reputable contractor would offer.
Section 707.004: Reasonable Proof of Payment
This sections states the insurer has the right to refuse payment of a claim for withheld recoverable depreciation or replacement cost holdback until the insurer receives “reasonable proof” of payment of the deductible by the policyholder. This proof of payment can come as a canceled check, money order under receipt, credit card statement, or copy of an executed installment plan contract or other financing arrangement that requires full payment of the deductible over time.
Texas House Bill 2103:
States a contractor is not allowed to act as a public adjustor or advertise to adjust claims for any property which the contractor is or may provide services for. This is due to a conflict of interest principle. Some contractors in Texas have been known to persuade a homeowner to sign a form granting them the authority to “handle their insurance claim” essentially allowing the insurance company to pay the roofer directly. Many roofing companies that claim they are insurance specialists usually have a good amount of knowledge on the subject, but use it for personal gain. There have been multiple class-action lawsuits against roofing companies in Texas that have incorrectly handled homeowner’s claims.
Texas is home to some of the biggest hail storms and therefore we believe it is essential for our community to be educated on insurance claim legislation to better care for their property and avoid scams. Trusted roofing companies can assist property owners by offering professional roof inspections and suggesting whether or not you should start the claim process based on the inspection findings.