Beware of those offers of free deductibles
If you are ever approached by a company promising to save you your insurance deductibles on storm damage repairs, beware. While special offers to save deductibles may seem enticing to homeowners, they may be considered insurance fraud.
It is illegal for your contractor to pay any portion of your deductible, and a new Texas law hands out stiffer penalties for contractors that do so.
At the Better Business Bureau, we sometimes see these offers after a major storm event.
A good example would be a roofing company knocking on homeowners’ doors offering to install a “free” roof after a hailstorm.
During such a transaction, the contractor may offer to handle all paperwork with the insurance company and waive or discount the homeowner’s deductible. Instead of submitting a bill for the replacement cost of the roof, the contractor includes the amount of the homeowner’s deductible.
In other instances, contractors may use an advertising agreement to trade for the deductible. That, too, can be illegal.
The Better Business Bureau of Greater Houston and South Texas is informing the public about this issue because it is one of the few situations where both the perpetrator and the consumer could be equally guilty of insurance fraud. A recent Texas law classifies it as a Class B Misdemeanor if a contractor pays a homeowner’s deductible or otherwise waives the deductible.
The law will go into effect on Sept. 1, 2019, and will require contractors to include a disclosure statement in their contracts that the insurance deductible must be paid.
The BBB offers the following tips for homeowners who may need to hire a contractor following storm damage:
• Never agree to any offers for free repairs. As a policyholder, you are responsible for your own deductible. If your project is for fixing damage, check your homeowner’s insurance to see if your project is covered and how you should proceed if it is.
• Try to verify the business’ identity. Ask for printed materials like a business card or flyers and confirm a physical location of the company. It is always better to deal with well-established businesses in the area than those that come in from out of state and may not be around to honor warranties. Check out any business at BBBHouston.org to learn how long the business has been operating and if it has any complaints or customer reviews.
• Beware of possible scams. Watch out for contractors in unmarked trucks or for companies requiring advance payment. Don’t succumb to high-pressure techniques, such as notices that the price is good for one day only.
• Consider seeking a second opinion. If a roofer tells you there is damage to your roof, be sure there actually is damage before filing a claim.
• Get it in writing. Always get estimates in writing and never let any work begin without a written and signed contract.
Do not be pressured into signing an agreement before you are ready and make sure you read and understand everything before signing.
Texas law allows three days for a consumer to cancel a sale made at their home, so make sure the contract states that requirement as well.
A recent Texas law classifies it as a Class B Misdemeanor if a contractor pays a homeowner’s deductible or otherwise waives the deductible.
The Better Business Bureau is an unbiased nonprofit organization that sets and upholds high standards for fair and honest business behavior. Visit www.bbbhouston.org or call 713-868-9500. Leah Napoliello is senior director of Investigative Services with the BBB of Greater Houston and South Texas. Send questions to Leah Napoliello, Better Business Bureau, 1333 West Loop South, Suite 1200, Houston, TX 77027, or e-mail lnapoliello@bbbhou.org. Include your mailing address and phone number.