“Free Roof”

THIS IS TOO IMPORTANT TO IGNORE…

Houston Roofing & Construction has performed thousands of insurance restoration projects, the vast majority of which include roof replacement. It is necessary to understand the full scope of an insurance claim to protect against possible fraudulent activity. Here’s the answer to the question, “Can you help me with my deductible?”

 

Your insurance company is going to send out an adjuster who is going to prepare an estimate and issue you a check. It is possible, and well within their right under your policy to withhold a portion of the payout as “recoverable depreciation”. The only way to recover the depreciation is to submit an invoice showing final payments received met or exceed the total claim amount. Therefore, the only way to show the insurance company one invoice amount and show you another is if your contractor prepares two invoices – this is insurance fraud.

 

One invoice will have the total cost of the project meeting or exceeding the total claim amount. Once the carrier issues the depreciation check and it is received by the homeowner, the contractor prepares a second invoice that reflects the cost of the job without the deductible cost for the homeowner; that is the fraud. Once you become a party to the fraud, you are as responsible as the perpetrator of it. Also, once the fraudulent invoice is sent to your insurance company via fax or email, it becomes wire fraud.

 

So, the only thing a “free roof” costs you is the opportunity to be charged with insurance fraud and wire fraud.

 

Under the Insurance Fraud Chapter (35) of the Texas Penal Code “Offenses Against Property”, if you are a party to the fraud listed above then, you have committed an offense under this section. Specifically, under 35.02, Section B, number 3 or 4:

(3) A Class A misdemeanor if the value of the claim is $500 or more but less than $1,500.00; or

(4)  A state jail felony if the value of the claim is $1,500.00 or more but less than $20,000.00.

 

Aside from the serious legal ramifications if your claim or your contractor is ever investigated and fraud is discovered, what about the moral questions?

1. If the contractor is willing to lie to the insurance company in order to get a job, what makes you think they won’t lie to you?

2. If all contractors in the area follow market costs for supplies and labor and your contractor is charging significantly less for the job then where is the discount coming from?  Shingles cost what shingles cost. And, regardless of what a contractor tells you, their overhead cannot save you $3,500 on a standard roof replacement. So, ask yourself, “What are they leaving out of the roof package to cut corners and save money?” Here are a few answers:

a) Unqualified estimator making a measurement or calculation mistake? If that is the case, you can bet they will come back to you and the insurance company for the additional amount they missed. This is a tactic often used to secure a contract. And once the material is delivered to your home that contractor has lien rights!

b) Substandard Materials.

c) Day Labor. These people can be picked up in front of any Houston Area DIY store.  They are not roofers. They have not received the proper training. And, they might not even be allowed to work in this country legally. Most importantly – THEY DO NOT CARRY INSURANCE!!!!!

d) No Insurance. Have your contractor provide you with a copy of their insurance coverage that includes your name and address as an Additionally Insured (AI). This will insure they have current coverage.

The State of Texas has no requirement for a “roofing contractor”, which puts contractors in a position to self regulate. If the contractors who are supposed to be regulating themselves are willing to commit fraud (and allow their customers to unknowingly commit fraud), then you have selected the wrong contractor.

The State of Texas Business and Commerce Code
Section 27.02 Certain Insurance Claims For Excessive Charges

(a) a person who sells goods or services (this is your contractor) commits an offense if:
(1) The person advertises or promises to provide the good or service and to pay;
(A) all or part of any applicable insurance deductible; or
(B) a rebate in an amount equal to all or part of any applicable insurance deductible;
(2) the good or service is paid for by the consumer from proceeds of a property or casualty insurance policy; and
(3) the person (contractor) knowingly charges an amount for the good, or service that exceeds the usual and customary charge by the person for the good or service by an amount equal to or greater than all or part of the applicable insurance deductible paid by the person to an insurer on behalf of an insured or remitted to an insured by the person as a rebate.
(b) A person (Homeowner/ Property owner) who is insured under a property or casualty insurance policy commits an offense if the person:
(1) submits a claim under the policy based on charges that are in violation of subsection (a) of this section; or
knowingly allows a claim in violation of subsection (a) of this section to be submitted unless the person promptly notifies the insurer of the excessive charges.

The State of Texas Penal Code, “Offenses Against Property”
Chapter 35 Insurance Fraud, Chapter 35 Insurance Fraud Section 35.02(7)(B)

§ 35.02. INSURANCE FRAUD. (a) A person commits an offense if, with intent to defraud or deceive an insurer, the person, in support of a claim for payment under an insurance policy:
(1) prepares or causes to be prepared a statement that:
(A) the person knows contains false or misleading material information; and
(B) is presented to an insurer; or
(2) presents or causes to be presented to an insurer a statement that the person knows contains false or misleading material information.
(a-1) A person commits an offense if the person, with intent to defraud or deceive an insurer and in support of an application for an insurance policy:
(1) prepares or causes to be prepared a statement that:
(A) the person knows contains false or misleading material information; and
(B) is presented to an insurer; or
(2) presents or causes to be presented to an insurer a statement that the person knows contains false or misleading material information.
(b) A person commits an offense if, with intent to defraud or deceive an insurer, the person solicits, offers, pays, or receives a benefit in connection with the furnishing of goods or services for which a claim for payment is submitted under an insurance policy.
(c) An offense under Subsection (a) or (b) is:
(1) a Class C misdemeanor if the value of the claim is less than $50;
(2) a Class B misdemeanor if the value of the claim is $50 or more but less than $500;
(3) a Class A misdemeanor if the value of the claim is $500 or more but less than $1,500;
(4) a state jail felony if the value of the claim is $1,500 or more but less than $20,000;
(5) a felony of the third degree if the value of the claim is $20,000 or more but less than $100,000;
(6) a felony of the second degree if the value of the claim is $100,000 or more but less than $200,000; or
(7) a felony of the first degree if:
(A) the value of the claim is $200,000 or more; or
(B) an act committed in connection with the commission of the offense places a person at risk of death or serious bodily injury.
(d) An offense under Subsection (a-1) is a state jail felony.
(e) The court shall order a defendant convicted of an offense under this section to pay restitution, including court costs and attorney’s fees, to an affected insurer.
(f) If conduct that constitutes an offense under this section also constitutes an offense under any other law, the actor may be prosecuted under this section, the other law, or both.
(g) For purposes of this section, if the actor proves by a preponderance of the evidence that a portion of the claim for payment under an insurance policy resulted from a valid loss,
injury, expense, or service covered by the policy, the value of the claim is equal to the difference between the total claim amount and the amount of the valid portion of the claim.
(h) If it is shown on the trial of an offense under this section that the actor submitted a bill for goods or services in support of a claim for payment under an insurance policy to the
insurer issuing the policy, a rebuttable presumption exists that the actor caused the claim for payment to be prepared or presented.
Acts 2005, 79th Leg., Ch. 1162, § 4, eff. September 1, 2005.