You have to pay your deductible

For many years contractors have gotten away with paying homeowners deductibles.  A new law was passed in 2019 that prohibits this.  The wording is very clear that this is a punishable law prohibiting such practices.  You must ask yourself if you want to do business with someone who is willing to risk not only themselves but you going to jail over a roof.  We at Mr. ROOFing & Gutters are not.

 H.B. No. 2102

 

 

 

 

AN ACT

 relating to the payment of insurance deductibles related to

 property insurance policies; creating a criminal offense.

        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

        SECTION 1.  Subtitle F, Title 5, Insurance Code, is amended

 by adding Chapter 707 to read as follows:

 CHAPTER 707. PAYMENT OF INSURANCE DEDUCTIBLE

        Sec. 707.001.  DEFINITIONS. In this chapter:

              (1)  "Person" means an individual, corporation,

 association, partnership, limited liability company, or other

 legal entity.

              (2)  "Property insurance policy" means an insurance

 policy issued by an insurer, including a county mutual insurance

 company, farm mutual insurance company, Lloyd's plan, or reciprocal

 or interinsurance exchange, that provides first-party coverage for

 loss of or damage to real property.

        Sec. 707.002.  PAYMENT OF DEDUCTIBLE REQUIRED. A person

 insured under a property insurance policy shall pay any deductible

 applicable to a first-party claim made under the policy.

        Sec. 707.003.  CONSUMER EDUCATION. The department, in

 coordination with other state agencies and stakeholders as

 necessary, shall develop and implement an education program related

 to the payment of property insurance policy deductibles. The

 program must:

              (1)  provide reasonable methods to educate insurance

 consumers and providers of goods or services that are regularly

 paid for from proceeds of property insurance claims; and

              (2)  include information regarding:

                    (A)  the requirements of this chapter and Section

 27.02, Business & Commerce Code; and

                    (B)  the conduct prohibited by Section 27.02,

 Business & Commerce Code.

        Sec. 707.004.  REASONABLE PROOF OF PAYMENT.  An insurer that

 issues a property insurance policy with replacement cost coverage

 may refuse to pay a claim for withheld recoverable depreciation or a

 replacement cost holdback under the policy until the insurer

 receives reasonable proof of payment by the policyholder of any

 deductible applicable to the claim. Reasonable proof of payment

 includes 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.

        Sec. 707.005.  RULEMAKING. The commissioner may adopt rules

 as necessary to implement this chapter. Section 2001.0045,

 Government Code, does not apply to rules adopted under this

 section.

        SECTION 2.  Section 27.02, Business & Commerce Code, is

 amended to read as follows:

        Sec. 27.02.  GOODS OR SERVICES PAID FOR BY INSURANCE

 PROCEEDS: PAYMENT OF DEDUCTIBLE REQUIRED [CERTAIN INSURANCE CLAIMS

 FOR EXCESSIVE CHARGES].  (a)  In this section, "property insurance

 policy" has the meaning assigned by Section 707.001, Insurance

 Code.

        (b)  A contract to provide a good or service that is

 reasonably expected to be paid wholly or partly from the proceeds of

 a claim under a property insurance policy and that has a contract

 price of $1,000 or more must contain the following notice in at

 least 12-point boldfaced type: "Texas law requires a person

 insured under a property insurance policy to pay any deductible

 applicable to a claim made under the policy. It is a violation of

 Texas law for a seller of goods or services who reasonably expects

 to be paid wholly or partly from the proceeds of a property

 insurance claim to knowingly allow the insured person to fail to

 pay, or assist the insured person's failure to pay, the applicable

 insurance deductible."

        (c)  A person who sells goods or services commits an offense

 if the person:

              (1)  advertises or promises to provide a good or

 service to an insured under a property insurance policy in a

 transaction in which:

                    (A)  the good or service will be paid for by the

 insured from the proceeds of a property insurance claim; and

                    (B)  the person selling the good or service will,

 without the insurer's consent:

                          (i)  pay, waive, absorb, or otherwise

 decline to charge or collect the amount of the insured's

 deductible;

                          (ii)  provide a rebate or credit in

 connection with the sale of the good or service that will offset all

 or part of the amount paid by the insured as a deductible; or

                          (iii)  in any other manner assist the

 insured in avoiding monetary payment of the required insurance

 deductible; or

              (2)  provides a good or service to an insured under a

 property insurance policy knowing that the insured will pay for the

 good or service with the proceeds of a claim under the policy and,

 without the insurer's consent:

                    (A)  pays, waives, absorbs, or otherwise declines

 to charge or collect the amount of the insured's deductible;

                    (B)  provides a rebate or credit in connection

 with the sale of the good or service that offsets all or part of the

 amount paid by the insured as a deductible; or

                    (C)  in any other manner assists the insured in

 avoiding monetary payment of the required insurance deductible. [A

 person who sells goods or services commits an offense if:

              [(1)     the person advertises or promises to provide the

 good or service and to pay:

                    [(A)     all or part of any applicable insurance

 deductible; or

                    [(B)     a rebate in an amount equal to all or part of

 any applicable insurance deductible;

              [(2)     the good or service is paid for by the consumer

 from proceeds of a property or casualty insurance policy; and

              [(3)     the person knowingly charges an amount for the

 good or service that exceeds the usual and customary charge by the

 person for the good or service by an amount equal to or greater than

 all or part of the applicable insurance deductible paid by the

 person to an insurer on behalf of an insured or remitted to an

 insured by the person as a rebate.

        [(b)     A person who is insured under a property or casualty

 insurance policy commits an offense if the person:

              [(1)     submits a claim under the policy based on charges

 that are in violation of Subsection (a) of this section; or

              [(2)     knowingly allows a claim in violation of

 Subsection (a) of this section to be submitted, unless the person

 promptly notifies the insurer of the excessive charges.]

        (d) [(c)]  An offense under this section is a Class B [A]

 misdemeanor.

        SECTION 3.  The changes in law made by this Act to Section

 27.02, Business & Commerce Code, apply only to an offense committed

 on or after the effective date of this Act. An offense committed

 before the effective date of this Act is governed by the law in

 effect on the date the offense was committed, and the former law is

 continued in effect for that purpose. For purposes of this section,

 an offense was committed before the effective date of this Act if

 any element of the offense occurred before that date.

        SECTION 4.  Section 27.02(b), Business & Commerce Code, as

 amended by this Act, applies only to a contract entered into on or

 after the effective date of this Act.

        SECTION 5.  This Act takes effect September 1, 2019.

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