Contrary to popular belief, it’s illegal for a contractor to waive your deductible or help you avoid paying it.
How would a contractor help me avoid paying a deductible?
One way is by giving you an estimate that’s higher than the actual cost to repair your home or roof. The contractor then uses the extra money paid by the insurance company to cover your deductible. Some contractors might offer rebates or credits in the amount of your deductible. That’s also illegal.
What’s the harm?
Contractors who say they will waive your deductible might be sending false information to your insurance company about the cost of repairs, also known as insurance fraud. And a contractor who offers to waive your deductible is likely making up the difference by cutting corners or using lower quality products. That can lead to more claims and repairs later. Contractors that absorb deductibles are usually “fly-by-night” companies, that are in the business to make a quick buck and will not be around in 2-5 years should you have issues again.
How will my insurance company know if I paid my deductible?
Your insurance company can ask for proof that you paid your deductible before it pays the full amount of your claim. You might have to show a canceled check, money order receipt, credit card statement, or a copy of the payment plan with your contractor.
What should I do if a contractor offers to waive my deductible?
Talk to your insurance company first. You can also report it to the Texas Attorney General’s Consumer Protection Hotline at 800-621-0508. Contractors who illegally waive deductibles could be fined or go to jail.
