Scary Truth about covering the deductibles.
In the roofing industry, there are lots of contractors who don’t even think twice when it comes to committing insurance fraud much less considering involving the homeowner in the fraud with them. Unknowing homeowners are taking part in insurance fraud when they agree to not pay their deductible and follow along with the contractor who claims they will get a roof for free if they just agree to let them do the repairs and cover the deductible. It sounds honest and simple enough to just deduct the price of the project down from the adjuster estimate discounting the deductible portion. How is that possible? How are they able to do that and still make money on the repairs? Those are two very good questions to ask and if you keep reading I will explain how they do just that and involve you, the homeowner, in a criminal act, INSURANCE FRAUD. Just giving a customer a discount is not illegal and contractors can offer discounts all they want as long as the project is not part of an insurance claim. You, the homeowner signed a legally binding contract with your insurance provider lining out the amount of the deductible you will owe if you ever have a claim. Let me break it down for you how letting the contractor, performing the repairs, covering your deductible becomes a criminal offense punishable by a huge fine and possible jail time.
“Discounted “or “free” roofing work (when being funded by insurance companies) is against the law in Colorado. There is no way around it. Roofers paying for clients’ deductibles, even partially, is illegal in Colorado. It has always been insurance fraud, but our senate has taken it a step further. In 2012, Governor Hickenlooper and the Senate passed Senate Bill 38 clearly specifying that the discounting a roof deductible in any way to be illegal. We have provided a link at the end of this article so you can read the law for yourself.
Let’s say, you, the homeowner has an insurance claim on your home damaged from a hail storm. Your roof needs to be replaced. A door knocking roofer stops by and tells you he will replace your roof and it won’t cost you a dime out of your pocket, sounds pretty good doesn’t it? WOW a free roof??? Not exactly, lets break the claim down and explain how insurance claims work. Lets say your claim for the roof is $20,000 dollars. Your deductible is $1,000 dollars so that means the insurance company will be paying for $19,000 dollars of the repairs and the deductible is your portion. Your insurance has already paid you the ACV ( Actual Cash Value ) of the the roof current market value based on the age of the roof. Let say the ACV for your roof is $5,000 dollars which you have already received. The repairs have to be completed and the final invoice sent in before your insurance company will send the second, and final payment of $14,000 dollars, which is the “Depreciation” portion of the claim. If you turn in the roofers estimate of $19,000 dollars your insurance company will love you for that because you saved the insurance company $1,000 dollars and now all they owe is $18,000 dollars for your roof and your final payment from your insurance company will only be $13,000 dollars. The only way to not have that happen is to send either a false final balance bill to the insurance company or try to supplement for the difference and bill above and beyond, for work not performed, to cover their discount to you. Either way it is illegal and insurance fraud which has implemented the homeowner in a criminal act. Refer to the link to read the laws regarding insurance fraud laws to follow when insurance is paying for your repairs. LINK TO SB-38 LAW IN COLORADO