Insurance fraud costs each family about $300 extra in premiums each year. In 2012, Colorado lawmakers passed what has become known as Colorado Senate Bill 38 (C.R.S 6-22-101 to 6-22-105) making it illegal for a roofing contractor to pay, waive, or rebate a homeowner’s deductible. The bill states that homeowners must disclose that the work is being paid in part by proceeds from an insurance claim. Homeowners can be first in line to help stop this fraud by being informed.

Homeowners pretending to not have a claim and failing to disclose that they have funds from a claim to pay for their repairs are breaking the law. Insurance fraud is serious, and it is in your best interest to protect yourself and your home during storm season. 

What’s the harm?

  • Storm chasers offering to waive your deductible are often out of state scammers who collect a deposit from you then never complete the work.
  • Contractors who waive your deductible may misrepresent the amount of the repairs to your insurance company to recover the amount of the waived deductible. This is insurance fraud.
  • Companies could cut corners or use inferior products to make up for the lost revenue.
  • Some companies reuse damaged vents and pipes to save money.
  • Your insurance company has the right to ask for proof you paid your deductible before it pays the full amount of your claim.
  • If you have a mortgage, the mortgage company is likely to ask for a copy of the insurance estimate, and ask for a signed affidavit that the claim has been paid in full in order to release the funds.

How can you protect yourself?

  1. Chose a local company and verify their address & phone number
  2. Ask for references and check them out
  3. Make sure they are members of the Colorado Roofing Association (CRA). All CRA members sign a code of ethics pledge. See our listing here.
  4. Look online for reviews or complaints. The BBB is a great place to start.
  5. Be wary of door knockers right after a storm and don’t sign anything.
  6. Shop for a competent, knowledgeable, and licensed contractor.
  7. You need a trusted company, not an estimate. The insurance company has already determined the price of the work and given you an estimate. The insurance company determines the pricing, not the contractor.
  8. Share your insurance estimate with your contractor to make sure nothing is missed.
  9. Make sure the contractor is licensed in your building jurisdiction and pulls the proper permits.
  10. Don’t wait too long to hire a contractor. Most insurance companies have time limits in place after a storm for repairs to be completed.