Among the bills passed in the 86th Texas Legislative Session, two were aimed directly at roofing contractors: HB2102 prohibits waiving deductibles, HB2103 expands UPPA laws already in effect.

Both bills were passed to safeguard consumers against shady contractors, especially after severe weather events. Texas ranks second in the nation for the number of hail-related claims and insurance companies, consumers, and now politicians have been working to crack down on the amount of fraud in the industry.

Here’s a breakdown of the changes HB02102F and HB02103F include.

HB2102 – Stops Waiving Deductibles

The first laws preventing contractors from waiving deductibles was passed in 1989. However, due to a poorly worded statute, most contractors have ignored the rule altogether. Over the past two decades, contractors waiving deductibles has become so common that reputable contractors cannot compete with “deductible eaters.” Homeowners who are unaware of the laws unknowingly commit insurance fraud because the offer of a free roof is so appealing. HB2102 fixes all of that. Here’s how:

  • HB 2102 clearly states 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 now contain a disclosure statement that insurance deductibles must be paid
  • insurance companies can now request “reasonable proof” that the deductible has been paid before making a replacement cost holdback payment

HB2103 – Expanding UPPA in Texas

UPPA laws were first introduced in Texas in 2013 and became part of the Texas Insurance Code under section 4102.163. However, the statue was only aimed at “roofing contractors” and wasn’t specific enough to include any other type of contractor in the state. Over the past few years, UPPA has expanded into several other trades outside of roofing – particularly water remediation and flooding. In an effort to protect homeowners, the Texas legislature has expanded UPPA using HB2103. Here’s what is changing:

  • HB2103 deletes the word “roofing” from the statue – now includes all contractors
  • new language is added to the statute clarifying that a contractor cannot use an assignment of benefits or power of attorney form

Key Takeaways

It’s critical for contractors – regardless of trade – to stay compliant with Texas state laws and policies. Ensure you have someone on staff keeping an eye out for new laws, litigation, and implement changes ASAP.

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