OKLAHOMA CITY — Oklahoma roofers will no longer be able to waive insurance deductibles for consumers under a new law that took effect this month.
House Bill 1940 prohibits any contractor who is paid with insurance proceeds from advertising or promising to pay any part of a deductible for roof repairs and replacements.
If a contractor violates the law, the insurer will not be required to consider the contractor’s estimate. Also, all roofers, adjusters and insurers providing an estimate must provide their customer with written notification of the law.
State Rep. Kyle Hilbert, R-Bristow, the measure’s author, said the majority of US states have passed similar legislation banning the practice in a bid to block insurance fraud.
He said one way that roofers may commit fraud is by billing the homeowner for the full cost of the job that the insurance companies agree to pay less the insurance deductible. Roofers then offer a discount or “rebate scheme” to adjust the cost of the job by the amount of the deductible.
“This inflated final bill for insurance restoration leaves the insurer overbilled and causes the homeowner to unknowingly be assisting with insurance fraud, which at the end of the day hurts everybody because everyone’s insurance then goes up to cover this cost,” Hilbert said.
He said the law was spurred in part by out-of-town storm chasers coming in and offering to waive or absorb homeowners’ deductibles.
Hilbert said he wants to make sure that roofing companies are reputable, doing everything by the book and the proper way.
Hilbert said lawmakers had been trying for two years to pass the measure. It became law Nov 1.
“Obviously there were some members that voted against it, but I didn’t hear any opposition really from the constituents or anyone else,” Hilbert said.
State Rep. Mark Lepak, R-Claremore, who voted against it, said he was “suspicious” of the measure from the beginning because there are a lot of things that hide the true cost of roof replacements. One might be that the insurance company adjustor may be working with a roofer.
“At a high level, I don’t want to do anything that imposes on the free market,” he said. “It looks to me like this is a question of some larger roofers not wanting to be undercut in profits by smaller roofers who might be willing to forego some the costs to get the business.”
He also said a lot of constituents liked that roofers could offer to cover their deductible. Lepak said even he had a roof replaced recently, and there was some discussion of that.
“From a consumer’s perspective … yeah, they would love to have their deductible covered by some bids on a roof,” Lepak said. “It’s less out of pocket to them.”
However, he said Oklahomans can use whatever roofer they want.
Nothing prohibits them now from getting an amount approved by their insurance company and essentially having different roofers bid the project.
He said if the roofers are willing to come in underneath that amount so the consumer is not out any money, that’s legal.
The Oklahoma Roofing Contractors Association, a nonprofit trade group, did not return a message left seeking comment.