03 Jul HOW TO GET OUT OF A ROOFING CONTINGENCY AGREEMENT
How to Get Out of a Contingency Agreement.
This is a question we are asked often.
The answer: Contingency agreements are simply tools being used by contractors to lock you into a “mental” agreement, dependent upon an approval by your insurance company.
This means you may cancel a contingency agreement at any time, for any reason, with no legal recourse against you and no money owed, as long as no work has taken place at your home and/or no materials have been delivered.
However, even if one or both of these scenarios has already happened, you would only owe for the amount of work completed or a possible return fee for any materials that have been delivered.
At no time are you eternally indebted to a contractor simply because you change your mind or were fooled into signing a piece of paper allowing a contractor to meet with your adjuster and then profit from your insurance claim.
As long as no actual manual labor/work has taken place at your home, you owe nothing. Meeting with an adjuster does not qualify as manual labor.
A REAL ROOFING CONTRACT:
An honest roofing contract should have detailed line items disclosing exactly what work will take place, details of exactly what specific materials are to be used, details of how long all warranties will be and for an exact dollar amount you are to be charged upon completion.
One page or cookie cutter contracts claiming to charge everything to your insurance company or with pricing labeled “to be determined” are extremely risky and should be considered highway robbery.
Would you agree to hire an auto mechanic with “pricing to be worked out after the work was done?”
Of course not. In fact, there should be nothing that you would ever agree to purchase this way.
Surprisingly, we see homeowner after homeowner finding themselves fooled into this type of agreement and living in fear. You have nothing to fear! Have you lost your mind? Stop being crazy. It is your house!
It has been you paying your insurance premiums every month! It is “you” your insurance company owes money to!
Just because you were fooled into signing something before you fully understood your insurance claim, in no way entitles any contractor to “all your insurance money”.
Feeling bad that you were tricked? It’s not all your fault.
Contractors have gotten very clever at getting homeowners to agree to these ridiculous agreements.
THAT’S HOW THEY GET YOU:
How does it work? Contractors know the average homeowner has no idea how a roofing insurance claim works or feel they will be taken advantage of by their own insurance company. (very common myth created mostly by vehicle accident commercials)
Contractors use this fear against you by fanning the flame against your insurance company and promising to be your saving grace by handling everything on your behalf.
It sounds like a great deal at first, until you start to ask questions and do your own research. Then, like thousands of homeowners before you, you want out of the agreement.
Regardless of what you are told, if you want out, contractors simply cannot afford to waste their time or money suing you in a court of law over a cancelled contingency agreement. As long as no work was performed, and/or no materials were delivered, it simply would not pay enough to even cover attorney fees, much less court costs, loss of time, more bad online customer reviews, BBB complaints, Rip off reports complaints, etc..
Loosing the occasional homeowner is all part of the job of a storm chaser.
Customers who cancel these ridiculous agreements, typically receive calls, emails and letters from contractors with threats of legal action for a few weeks. Then the contractor eventually moves on to the next unsuspecting homeowner.
Over a 30 year period, we have personally witnessed thousands of canceled contingencies and only once did a contractors threats actually result in a civil court date. The contractors case was immediately thrown out and the homeowner was awarded thousands of dollars for harassment.
Why? The state is going to protect “you”, the homeowner. Not some storm chasing contractor that wants all your insurance money.
Just because a contractor drove to your house and was present when your roof claim was approved, in no way obligates the contractor to your insurance money or to your insurance claim.
Regardless of what the contingency agreement says, you owe nothing unless actual work took place at your home and/or materials were delivered.
YOU ARE THE POLICY HOLDER!
If “you” have legitimate roof damages to “your” home that “you” insured, “your” insurance claim is going to be approved whether you have a contractor present during the inspection or not.
That is the scam. The smoke and mirrors, the slight of hand. Storm chasers want you to believe your insurance claim approval was all because of them.
The next form of proof, is the law itself. There is actually a Texas law forbidding contractors from representing homeowners during insurance claims or acting as public adjusters, if they also intend to perform the work. (section 4101.201-203 and 4102 .201-204 of the Texas Insurance Code).
It seems to be a loosely written law that contractors mostly ignore, but it is still a law protecting you.
Since 2003, section 4102 .051 of the Texas Insurance Code has required individuals to be licensed as public adjusters, if they intend to adjust claims on behalf of insureds. Even if you are properly licensed at the time as an adjuster, section 4 102. 158 of the Texas Insurance Code makes it a conflict of interest to “adjust a claim on behalf of an insured” and “make the repairs associated with the claim.”
To be clear, it is a violation of the Texas Insurance Code to profit from both adjusting the claim or acting on behalf of the insured and making the repairs. Knowing violations can subject an adjuster/contractor to loss of license, disciplinary proceedings and fines or penalties. See Tex. Ins. Code §§ 4102.201-204.
Contractors Don’t Care!
Even knowing there is a written law forbidding this practice, contractors do not care. Defiantly ignoring the laws, contractors continue on with their pursuit of falling gold from the skies. Taking over an insurance claim is far too profitable to worry about an occasional lost job here and there.
Because contractors mostly ignored this law, in July of 2013, The Texas legislature attempted to strengthen the law by rewriting it to include the following:
Section 4101 of the Texas Insurance Code now states:
A roofing contractor may not act as an adjuster or advertise to adjust claims for any property for which the contractor is providing, or may provide roofing services, regardless of whether the contractor holds a public adjusters license under this chapter, or not.
What this means, is that now, in addition to public adjustors, roofing contractors (even if licensed as public adjusters) are subject to loss of license, disciplinary proceedings and/or possible fines or penalties for violations of the statute. (See Tex . Ins. Code§§ 4101.201-203 and 4102 .201-204.)
No One Cares!
Despite rewriting the laws and all the warnings and possible fines, contractors and sales people are still using contingency agreements and tarp repairs as a way to bully homeowners into handing over all their claims money.
WHY? Because it’s worth it!!
The sad reality is that most homeowners simply have no idea how insurance claims work or are afraid their insurance company will take advantage of them. This is the driving force making contingency agreements such a popular choice.
From insurance claims, to roof estimates, homeowners are simply being fast talked into handing over all their insurance money without really knowing it.
Most homeowners simply do not know what to do after a hail storm and are being tricked into feeling as if they have no choice or need the contractors help with handling their claims. All Lies! You do not need anyone helping you with your claim.
There are huge profits in each hail claim and contractors want it all.
It’s worth it to contractors to risk losing the occasional homeowner here and there and keep going. There are thousands more homeowners who are unknowingly willing to give away all their insurance money.
This very thing is happening to homeowners all over the Dallas Fort Worth area, every time there is a hail storm.
Legitimate contractors do not rush out to knock on doors or call you after hail storms. Only aggressive sales people or middleman companies looking to take over your claim.
Always Demand Written Estimates. Purchasing a new roof should be handled the same way you would purchase anything else of value. Get written estimates, do your research, choose wisely.
Written estimates will speak volumes as to what type of contractor you are really dealing with. The number one mistake homeowners report making was hiring a contractor simply because they liked the sales person.
Later, the homeowners admitted had they been given a written estimate for comparison, they would not have hired them.
Do not simply give away all of your insurance money because you do not understand how claims work or you are afraid to handle your own claim. Claims are not hard. It’s as easy as making a 5 minute phone call.
There is nothing to fear. It is your claim. It is your home. It is your insurance money. You do not owe anyone anything. Cancel the contingency agreement and move on. Do not let contractors scare you.
As long as no work has been done and no materials have been delivered, you owe nothing!
Even if temporary tarp coverings were performed the maximum amount owed to the contractor ranges between 150 and 500. You certainly do not owe anyone a large percentage of your insurance claim, or thousands of dollars, simply because they were there when your claim was approved or they nailed down a few strips of felt on your roof.
Want to see what a real roof estimate looks like? Give us a call or fill out our contact page. We can put an honest written estimate into your hands within 24 hours or less.