Texas - Legislative Update - 2019
The 86th Texas Legislative Session came to an end recently. We now report the Texas Legislature wrapped up on some bills with important information as follows:
HB2102 - Prohibition Against Waiving of Deductibles -- The waiving of deductibles has been improper in Texas since 1989. It was argued that due to a poorly worded statute, many contractors ignored the prohibition and the waiving of deductibles had become common in Texas. Further, reputable contractors who refused to break the law could not compete with the “deductible eaters”. Lobbyist took the position that policyholders 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 now makes it somewhat more clear that deductibles must be paid. The new law seems to state a contractor now commits a violation of the new law if it pays, waives, absorbs, rebates, credits, or otherwise declines to charge or collect a deductible (emphasis added). Contracts must also contain a disclosure statement that insurance deductibles must be paid. Finally, an insurance company may request “reasonable proof” that the deductible has been paid before making a replacement cost holdback payment.
HB2103 – Prohibition Against UPPA -- Section 4102.163 of the Texas Insurance Code enacted in 2013 prohibited the unauthorized practice of public adjusting by “roofing contractors”. Lobbyist argued since that time they have seen the UPPA problem spread to other types of contractors, particularly in water damage claims and with some so-called “general contractors”. HB2103 simply deletes the word “roofing” from the existing statute to broaden the scope of the UPPA prohibition to all contractors. Also, new language is added to the statute clarifying that a contractor cannot use an assignment of benefits or power of attorney form to avoid this prohibition.
Finally, as you have probably all heard by now, the proposed Reroofing Contractor Registration Act failed in the House.
Please note that the legislation is not quite law yet. We are now waiting on the Governor to sign the legislation. Assuming he does, the legislation goes into effect on September 1, 2019.
***Mandatory deductible disclosure language must be in all contracts entered into after September 1st. Insurance companies may begin requesting reasonable proof of payment before making RCV holdback payments effective September 1st.***
For more information on the above contact Mr. Voss directly at the number listed above, or e-mail him at [email protected]
Relevant Links:
