2019 HB2102: Prohibition against “Deductible Eaters”

The waiving deductible practices of some contractors has been a widespread issue throughout Texas and other states.  Policyholders are duped into fraudulent insurance claims with promise of “rebates, deductible waivers, credit” for their business. Most commonly done in the roofing industry, shady “deductible eaters” are cannibalizing reputable contractors with promise of a “free” roof. Their practices are illegal but ignored due to an improperly worded doctrine developed in 1986 in attempt to stop fraudulent practices.

The revised House Bill 2102 signed last month by Governor Abbott is designed to combat the devastating effects of roofing fraud. It clearly states that contractors are violating the law if it pays, rebates, credits, decline to charge or collect deductibles. Insurers may ask for reasonable proof of payment which are: canceled check, money order receipt, credit card statement or an executed installment plan. If there is not a proof of payment for the deductible, then insurers can refuse to pay the replacement cost hold-back. This important legislation will both protect Texas consumers from illegal fraud schemes and ensure that reputable contractors are on a even level playing field in competitive business.

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