Tuesday, December 3rd, 2019 by Thaddaeus Biediger
HB2102 - Prohibition Against Waiving of Deductibles (available here) -- The waiving of deductibles has been improper in Texas since 1989. Unfortunately, due to a 1990 opinion by the Attorney General, many contractors ignored the prohibition and the waiving of deductibles has become common in Texas. Reputable contractors who refused to break the law could not compete with the “deductible eaters”. Homeowners were lured to sign contracts with shady contractors with promises of “A Free Roof!” And homeowners were duped into committing insurance fraud when they failed to advise the insurance company in submitting a request for replacement cost holdback that the deductible portion of the claim had not been incurred. HB2102 fixes all of these problems by making it crystal clear that deductibles must be paid. A contractor commits a violation of the new law if it pays, waives, absorbs, rebates, credits, or otherwise declines to charge or collect a deductible. Contracts must also contain a disclosure statement that insurance deductibles must be paid. An insurance company can request “reasonable proof” that the deductible has been paid before making a replacement cost holdback payment. This important legislation will both protect Texas consumers from illegal fraud schemes and ensure that reputable contractors who collect deductibles are on a level playing field in competing for business.