By: Trent Appleby
Homeowners affected by the recent storms in north Texas need to be aware of a newly enacted law prohibiting the payment of policy deductibles by contractors and roofers. In the past, it was common practice for contractors to offer to waive or absorb a policyholder’s deductible for repairs after storms. The new law makes clear this practice is not allowed in Texas and homeowners must pay the required insurance deductible for a first-party claim made under the policy.
A key provision of the law provides that an insurance company may refuse to pay a claim until the insurer receives “reasonable proof” of payment of the deductible by the policyholder. As a result, homeowners should be prepared to provide to their insurer “reasonable proof” of payment of the deductible applicable to the claim. Reasonable proof of payment may be in form of a canceled check, credit card statement, or copy of any executed installment plan or financing arrangement that requires full payment of the deductible over time.
Contractors also need to be aware of the new law and the consequences for its violation. Under the law, contractors may not: (1) pay, waive, absorb, or decline to charge or collect the insured’s deductible, (2) provide a rebate or credit that offsets all or part of the insured’s deductible, or (3) assist the insured – in any manner – in avoiding payment of the required insurance deductible. The law also prohibits contractors from even advertising to do so. A violation of the law is a Class B misdemeanor.
Accordingly, before you submit a claim to your carrier or contract with a repair or restoration company, be mindful that you are required by law to pay the deductible under your homeowner’s policy and avoid any company offering to pay the deductible on your behalf.
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About Trent Appleby
Trent focuses his practice on commercial and corporate transactions, real estate transactions, and corporate formation and governance matters. He also has experience in litigation, with an emphasis on commercial and residential construction litigation. In addition to construction-related matters, Trent prosecutes and defends various commercial and real estate-related disputes.Learn more…