Colorado Senate Bill 38 (SB38), the Consumer Protection/ Residential Roofing Bill, was signed into law June 6, 2012. Every homeowner should be aware of this bill for their own sake and protection from dishonest roofers that are still offering to pay your deductible.
What’s In SB38?
This bill “Concerning measures to protect consumers who engage a roofing contractor to perform services on residential property” has a lot of new rules that govern what a roofing contract should have included in its verbiage. Items like scope of work, an amount for the work being performed, 72 hour rescission notice, and the provision of the roofing contractors general liability insurance information to name a few.
The New Deductible Law:
SB38 states the following when it comes to the deductible:
(c) PROHIBITING ROOFING CONTRACTORS FROM PAYING, WAIVING, REBATING, OR PROMISING TO PAY, WAIVE, OR REBATE ALL OR PART OF ANY INSURANCE DEDUCTIBLE APPLICABLE TO AN INSURANCE CLAIM MADE TO THE PROPERTY OWNER’S PROPERTY AND CASUALTY INSURER FOR PAYMENT FOR ROOFING WORK ON THE RESIDENTIAL PROPERTY COVERED BY A PROPERTY AND CASUALTY INSURANCE POLICY.
What’s A Deductible?
When a homeowner’s property is damaged due to a hail storm, they call their insurance company and file a claim on their residential roof. The insurance company assigns an adjuster to come out to the property and asses all the damage caused by hail. Once they do this, the adjuster provides a full report with an estimate and total of the damages. From that total, they will temporarily deduct monies (Recoverable Depreciation) until all the work on repairing or replacing is complete. They will supply an initial check (Actual Cash Value check) to get the roof replacement started. However, the insurance company will withhold your deductible from the initial payment. The deductible is the homeowners responsibility portion of the claim. Much like a medical claim, basically it’s your “co-pay” portion. Then, when the job is complete, the insurance company will release the final Recoverable amount to complete the final payout of the claim.
$20,000.00 Claim Total
-$1,000.00 Deductible
=$19,000.00 New Payout Total
-$6,000.00 Recoverable Depreciation
=$13,000.00 Actual Cash Value (initial check)
+$6,000.00 Recoverable Depreciation (when work is complete)
=$19,000.00 Total Payout
In this scenario, the Claim Total is $20,000.00 minus the $1,000.00 deductible (co-pay) = $19,000.00 total payout left to get $20,000.00 worth of work done.
The Problem:
This is where roofers are wanting to pay, waive, or rebate the deductible. Often, it’s a tactic used by out of state roofers. They will offer to waive the deductible amount in order just to get your business. Thus, the homeowner is not out ANY money out of pocket to get the entire claim completed. Remember, it’s the law that neither side can participate in this. The homeowner must pay the roofer their deductible, or their responsibility, or their “co-pay” if you will. In other words, the roofer must prove that they collected the $1,000.00 deductible in the above scenario to get the full amount of the claim total back to $20,000.00. It’s the LAW.
The Answer:
Unfortunately, there are many roofers that are still offering to pay your deductible. Don’t fall prey to illegal actions, insurance fraud or sales tactics. Beware. This is illegal and puts you and the roofer in danger of breaking the law. Simply pay your deductible to the roofing company and all will be well.
For your review, here is a copy of the entire Senate Bill 38 as well as some information from Colorado Roofing Association about it.
If you are looking for a trustworthy A+ rand 5 star rated roofing company in Colorado Springs, CO that provides professional roof inspections, roof replacements, roof certifications and roof repairs, call 719-748-6364 or visit us Klaus Roofing.
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