Minnesota and Deductibles

2010 Session Laws Minnesota
revisor.mn.gov/laws/?year=2 … ter&id=324

Section 1. [325E.66] INSURANCE CLAIMS FOR RESIDENTIAL ROOFING
GOODS AND SERVICES.
Subdivision 1. Payment or rebate of insurance deductible. A residential
contractor providing residential roofing goods and services to be paid by an insured from
the proceeds of a property or casualty insurance policy shall not advertise or promise to
pay or rebate all or part of any applicable insurance deductible. If a residential contractor
violates this section, the insurer to whom the insured tendered the claim shall not be
obligated to consider the estimate prepared by the residential contractor.
For purposes of this section, “residential contractor” means a residential roofer, as
defined in section 326B.802, subdivision 14, a residential contractor, as defined in section
326B.802, subdivision 11, and a residential remodeler, as defined in section 326B.802,
subdivision 12.
Subd. 2. Violation. If a residential contractor violates subdivision 1, the insured or
the applicable insurer may bring an action against the residential contractor in a court of
competent jurisdiction for damages sustained by the insured or insurer as a consequence
of the residential roofer’s violation.

This is great news! It will finally stop some of the hacks running around paying deductibles just to sign a customer.

Nice and thanks for sharing. Likely naive but it sure would be nice to see this adopted across the country.

I hope this moves HERE soon!

Every damn TV commercial, billboard, and yellowpage ad here, is “Free Roof” or “deductible assistance program” or “we pay up to $1,000 of your deductible”

on the damn advertisements!!!

I like it good post stormer.

thats why i left oklahoma. i found a nice little storm and i sold 10 roofs in the first week at full price including deductable.

thats great Jrock.

Very interesting! Still see my competition running around covering deductibles all the time.

To my knowleadge this law was made this year as prior to this year and new law you could cover a deductible but the insured could not profit from a claim.

Now if a home owner doesn’t do any work and pockets the money he or she would technicaly profit from the claim.

My guess is it will not be enforced unless an insurance company wants to go after a contractor for it and for other problems. For example a contractor who’s been questioned for manipulating hail or wind damged on roofs with discontinued shingles.

I see alot of companies that offer marketing credits that equal or a little less than the deductible, but no where states they are covering the deductible.

How is that looked upon?

[quote=“Tryin2Learn”]I see alot of companies that offer marketing credits that equal or a little less than the deductible, but no where states they are covering the deductible.

How is that looked upon?[/quote]

If I refuse to call a square a square, but instead call it a circle, does the square now become a circle?

I dont think the insurance companies care, if they really cared then they would make the checks out to the roofing companies and add the deductible to the premium payment! that way they knew what they were paying for and who they were paying

I recently had a customer whose insurance paid for a full replacement. The deductable was just under $4000 and the customers told us they didn’t have the cash on hand to pay it all at once. The roof leaked and needed to be repaired ASAP.

We agreed to let them pay it out over the next 12 months.

Just for the sake of discussion, what if they default or declare bankruptcy before the deductable is paid to us? Do we pursue them legally and spend more money to collect what may be a few hundred dollars? If we dont, have we then “covered” the deductable ? I think its issues like this that make it near impossible for enforcement of the so-called deductable laws.

In my opinion, once an insurance company agrees to pay for a new roof, the cost to them is pretty much fixed-RCV less deductable is what they have to pay.
At that point, they just want to know the policy holder has put a quality roof on that will not generate further claims unless of a catastrophic event.

I personally know a fraud investigator for a major insurance company(we did his roof!) He told me that almost all of his time is spent chasing fraudulent claims(arson, mechanical damage, etc). The insurance companies can save money that way, not auditing deductable payouts.

So right or wrong, they just dont have a lot of incentive(profits) to pursue such gray area issues.

[quote=“PeteW”]I recently had a customer whose insurance paid for a full replacement. The deductable was just under $4000 and the customers told us they didn’t have the cash on hand to pay it all at once. The roof leaked and needed to be repaired ASAP.

We agreed to let them pay it out over the next 12 months.

Just for the sake of discussion, what if they default or declare bankruptcy before the deductable is paid to us? Do we pursue them legally and spend more money to collect what may be a few hundred dollars? If we dont, have we then “covered” the deductable ? I think its issues like this that make it near impossible for enforcement of the so-called deductable laws.

[/quote]

I don’t think your example is a very good analogy at all. You quoted and invoiced for the correct amount, bankruptcy prevented you from collecting it.

I do agree that it is generally a waste of time discussing this whole issue over paying or not paying for deductible. If Sales Reps are losing much business to companies doing that, they either need to improve their Sales Pitch or their roof crew needs to improve their work.

I don’t think your example is a very good analogy at all. You quoted and invoiced for the correct amount, bankruptcy prevented you from collecting it.

I do agree that it is generally a waste of time discussing this whole issue over paying or not paying for deductible. If Sales Reps are losing much business to companies doing that, they either need to improve their Sales Pitch or their roof crew needs to improve their work.[/quote]

Well, I guess my point is what is to stop any roofer from "offering " to finance the deductable and then never making much effort to collect? In effect, they covered it.

Trying to prosecute or sue anyone for not collecting a deductable is almost impossible.

I think there is a difference between openly advertising to pay the deductible, as part of your advertising campaign versus a double secret implied under the table agreement between the HO and Roofer that they’ll not have to pay the financed deductible portion.

My point again is, who cares? We’ll not likely see this practice deterred substantially in our careers. I’d rather apply my time and mental energy towards doing something productive than lamenting over something I cannot change anyway.