Effective September 1st, 2019 a new Texas law took effect that means big changes for homeowners insurance claims and the storm restoration industry. There has been a law in Texas for several decades that made it illegal not to pay your deductible in conjunction with a repair after receiving proceeds from an insurance claim.
The old Texas law, that governed insurance deductible payments, was relatively vague and the Texas courts ended up questioning its validity back in the late 1980’s. In Texas this most often involved shingle roof related insurance claims that were storm damaged by hail or high winds. That lead to many contractors offering to absorb, or waive, the deductible so the homeowner would have no out pocket expense in completing repairs in conjunction with an insurance claim. The deductible eating arrangement was an illegal practice all along. Contractors would primarily provide a false invoice or documentation representing that the total repair cost included the homeowner paying the full deductible. Those actions have always technically constituted insurance fraud.
The new law created by TX HB2102 was passed by the Texas Congress and signed into law by Governor Greg Abbott to replace the old law effective 9/1/19. In no uncertain terms the new law makes it a state crime to engage with a contractor to have them waive, absorb, rebate, or any other method of assisting a homeowner in not paying the deductible in conjunction with an insurance claim.
This news report video from an Amarillo, TX TV station does a pretty good job of explaining the details. The Texas Department of Insurance is tasked with educating the public about the new law and enforcing it. Hopefully there will be extensive education coming from the TDI as well in the near future.
Also, here is a link to the Texas Department of Insurance where they posted a notice regarding the new state law:
https://www.tdi.texas.gov/news/2019/tdi08072019.html
