As I was driving through Dallas this week I noticed more and more roofing companies advertising help with hail damage claims. Anyone who has been involved in property claims in Texas knows that roofing contractors are a common sight. In fact, Texas seems to have more roofing contractors involved in claims than any other state.
While there is absolutely a role for contractors in the claim process, this role does not involve negotiating a settlement, arguing coverage, or otherwise adjusting a claim. That part of the claim process is, and should be, left to licensed adjusters and attorneys. Adjusting a claim without a license is illegal, regardless of whether you represent a policyholder or insurance company.
Due to the prevalence of hail storms and the sheer number of claims being submitted in the Midwest states, the line between roofing contractor and adjuster has seemingly been blurred on both sides of the fence. Carriers often hire preferred vendors to investigate and settle roofing claims and many roofing contractors are directly negotiating claims on behalf of policyholders that have retained them to repair the home or business.
The Texas department of insurance, the Texas Association of Public Insurance Adjusters, and various other industry groups, have been working to prevent the unlicensed adjustment of claims for some time. In furtherance of those efforts, Governor Perry recently signed H.B. No. 1183 into law amending the insurance code in the following ways:
- An adjuster working for an insurance carrier is prohibited from adjusting a loss relating to roof damage if that person is also a roofing contractor, provides roofing services or products, or is a controlling person in a roofing-related business;
- A roofing contractor may not act as an adjuster (for an insurance carrier or a policyholder) or advertise to adjust claims for any property that the roofing contractor is providing, or may provide, roofing services, regardless of whether that contractor is a licensed adjuster or not;
Insurance companies, contractors, adjusters, and policyholders should be aware of this new law because violations can be dealt with severely depending on the circumstances. It is always better to be safe than sorry so if you have any questions about this law or its application feel free to contact us at any time to discuss your specific situation.