Deductible: what Texas law says

The law in one paragraph

Section 27.02 of the Texas Business and Commerce Code, in its current form since September 1, 2019, makes it an offense for a seller of goods or services that expects to be paid from a property insurance claim to advertise or promise to pay, waive or offset your deductible, or to actually do so, without the insurer's consent. It is a Class B misdemeanor.

The notice you should see on the contract

For work of $1,000 or more that is expected to be paid from insurance, the contract must carry this notice in at least 12-point bold type:

Texas law requires a person insured under a property insurance policy to pay any deductible applicable to a claim made under the policy. It is a violation of Texas law for a seller of goods or services who reasonably expects to be paid wholly or partly from the proceeds of a property insurance claim to knowingly allow the insured person to fail to pay, or assist the insured person's failure to pay, the applicable insurance deductible.

Red flags

• "We'll cover your deductible" or "$0 out of pocket"
• A "free roof" paid for entirely by insurance
• A rebate, gift card or yard-sign payment that happens to equal your deductible
• An estimate padded with work that was not done, to absorb the deductible
• An offer to handle or negotiate your claim with the insurer for you

Besides breaking the law, the last two can put the homeowner in the middle of an insurance fraud problem. The insurer can ask for proof that you paid your deductible.

What is allowed

Paying your deductible over time through a lender is your own loan, and you still pay it. Choosing a less expensive material, or skipping an upgrade, is a normal decision about the scope. What the law forbids is the contractor quietly making the deductible disappear.

Where to report it

The Texas Department of Insurance lists two places: the Texas Attorney General's consumer line at 800-621-0508 and the Texas Department of Insurance at 800-252-3439.