Insurance Claims & Deductibles

Since 1989, waiving insurance policy deductibles had become a common practice throughout the state of Texas. The companies and individuals who failed to collect the required insurance deductibles were known as “deductible eaters.” Through promises such as a free roof inspection or replacement, many homeowners have been convinced to sign on with these deductible eaters. Unfortunately, this can lead to the homeowners unknowingly committing insurance fraud!

However, a new law was passed during the 2019 legislative session, which requires property owners to pay – and contractors to collect – any deductible required under the owner’s insurance policy. This new law, titled Payment of Insurance Deductible, went into effect September 1, 2019. It is located in Chapter 707 of the Texas Insurance Code, and Section 2 of the Texas Business & Commerce Code. It applies to any claim by a property owner of damage of more than $1,000 to real or personal property which will be paid in whole or in part by insurance proceeds.

Although payment of insurance deductibles was always required by law, enforcement was difficult due to the many loopholes available to owners and contractors. However, under the new law just passed, these loopholes are now firmly closed. A violation occurs any time a contractor: pays for, waives, absorbs, rebates, credits or offsets, or otherwise assists the insured in any other manner in avoiding the financial payment of a required insurance deductible.

Individuals who violate this law are subject to a Class B misdemeanor offense, which can result in 180 days in a county jail and a fine of up to $2,000.

Violating the new deductibles law can also lead to fraud charges against the Contractor and the Property Owner for anyone who misrepresents the payment of an insurance deductible to an insurance company for the purpose of obtaining release of the depreciation or any other insurance company holdback.
Because Section 707.004, known as the reasonable proof of payment provision, requires the Owner to provide proof that the deductible has been paid or is being repaid under a qualifying repayment plan.

This “reasonable proof” is defined as: a “canceled check, money order 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.” (Tex. Ins. Code §707.004.)
In order to keep itself and its customers from violating this new law or committing insurance fraud, NewRuf follows this new law by collecting all required deductibles. If a property owner believes that paying the deductible, even if paying over time, would create a financial burden, the owner should ask its insurance adjuster to waive the requirement to pay the deductible.

NewRuf is not a Public Insurance Adjuster and is not providing or offering to provide public adjusting services to its clients. As such, nothing you may read on this website or in any other NewRuf publication should be construed as a promise to negotiate your claim. The information and services provided by NewRuf are limited to evaluation and discussion of damages, repair scope and pricing.

Roofing Insurance Claims & Deductibles in central texas

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