There’s no doubt about it: roofing problems can be extremely stressful. It’s enough to have your roof, which protects your home and everything and everyone in it, at risk. Things become even more complex and stressful when you bring the insurance company into it. Suddenly, not only do you possibly need to find a place to stay while the repairs are completed and deal with damaged possessions, you have the pressure of an insurance claim on top of it.
Deductibles are an important part of any insurance policy, and your homeowners’ insurance is no exception. Is there any chance of having your deductible waived by the insurance company?
What is a Deductible and What Does it Mean to Waive It?
Insurance can be confusing at times, with lots of terms to memorize and different payments to think about. Your deductible is set at a certain dollar amount when you first purchase your insurance policy, and it is the amount that you have to pay before your insurance company will start covering expenses. You’ll likely need to provide proof to the insurance company that you have paid a roofing company at least the amount of your deductible before they start paying for repairs. Visit our website to learn more at thebrooklineroofers.com.
For example, if the total estimate for your roof repair is $5,000 and you have a $2,000 deductible, you would pay the first $2,000 directly to the roofers or contractor, who would then bill the insurance company for the remaining $3,000.
Waiving the deductible would mean that you wouldn’t have to pay that amount to the contractor first- you could just go straight to having the insurance pay for the repairs. Sounds great- but how does it work?
Can a Contractor Waive a Deductible?
At first, it might seem like a nice gesture: your contractor offers to waive your deductible. There’ll be less hassle with the insurance company, plus your benefits will kick in right away instead of having to wait and pay out of pocket, so the whole job will be cheaper. But wouldn’t the insurance company be in charge of the deductible, not the roofers? Can a contractor technically do that?
Though it would be nice, the answer is no. Unfortunately, a roofing company cannot legally waive your deductible. In fact, if you say yes when the contractor asks you if you’d like them to do this, you could be guilty of insurance fraud without even knowing it.
How Do Roofing Companies “Cover Deductibles?”
Chances are, if a roofing company offers to cover your deductible, it’ll be presented as an offer to save you money. However, what it will actually do is cheat your insurance company and make you and the contractor both guilty of insurance fraud.
Using our earlier example of a roofing job that costs $5,000, let’s assume that your insurance deductible is $1,000. Your contractor gives you the $5,000 estimate, tells you not to worry about the deductible, and assures you that their company will pay it. You agree, thinking this means you won’t have to pay anything for your new roof.
If the roofer had gone the legal route, they would have accepted $1,000 from you and reported the estimate to the insurance company, who would have then cut them a check for $4,000 to cover the remaining costs. However, if the roofing company is running a scam, they will artificially inflate the estimate to $6,000 when they report it to the insurance company, accounting for the amount of the deductible but claiming to have received the deductible from you. The insurance company will subtract the $1,000 deductible and cut the company a check for $5,000.
What Happens After a Roofing Company Waives the Deductible?
What happens next depends on the company. If you are lucky, the work will proceed as expected. However, in many cases, the roofing company will try to keep as much profit as possible from their scam. This means that they may use low-quality materials and shoddy work to perform the repair. You may not find out that you have received a subpar roofing job until you have problems with your new roof months later.
By the time you figure it out, the company may not be reachable. Phones may be disconnected, a search for the company on Google reveals nothing, and the individual contractor you talked to may even have left town. What’s worse, you are now on the hook for insurance fraud along with the missing contractor.
How can that be? Weren’t you a victim of the scam too?! Yes, you were- but you also unknowingly participated in it. Unfortunately, this can lead to some trouble with your insurance company. If your benefits are contingent on you first paying the deductible, they tend to have a problem with providing those benefits when you haven’t paid the deductible- even if the contractor was dishonest and told you that they would pay it.
Texas Takes a Stand
Roofing fraud became such a big problem in Texas that they passed a specific law to combat it. House Bill 2102, passed in May of 2019, imposed a fine up to $2,000 and up to six months in jail for contractors who offered to waive customers’ deductibles. Though it was already an illegal practice since it fell under the umbrella of insurance fraud, the new law imposed punishments directly on the contractors responsible, rather than only the company they were with. The law also increased awareness of this relatively common scam, making the public more cautious and aware when hiring roofing companies.
Avoiding Roofing Scams
Now that you know that it is not legal for a roofer to waive or cover your deductible, the most important thing to know is that you should never work with a company who offers to do this! No matter how nice or charming they seem, any roofer should know that this is an illegal and deceptive practice. Turn the other way and check reviews and Better Business Bureau complaints, and ask neighbors for recommendations.
Another common form of this scam is where a roofer will show up at your door, say that they were working in the area, and proceed to tell you about how you can get a “free” roof. Nothing is ever truly free- as good as it may sound, it’s best to close the door.