August 9, 2023

The Risks of Waiving Insurance Deductibles When Hiring Contractors

Beware of contractors offering to waive your insurance deductible—it's illegal and can lead to fraud and subpar repairs. Source: Texas Department of Insurance.

The Risks of Waiving Insurance Deductibles When Hiring Contractors
<p-color-red>Is It Acceptable for Contractors to Eliminate My Deductible?<p-color-red>

No, contractors cannot legally waive your deductible or help you avoid paying it. Your deductible is a component of your home insurance policy, and attempting to evade it is against the law.

<p-color-red>Ways Contractors May Attempt to Bypass Deductibles<p-color-red>

Some contractors may offer you an estimate that exceeds the actual repair cost. They then use the surplus amount paid by your insurance company to cover your deductible. Alternatively, they might propose giving you rebates or credits equivalent to your deductible—another unlawful practice.

<p-color-red>The Consequences of Such Actions<p-color-red>

Contractors who promise to waive your deductible could be involved in fraudulent activities by submitting false repair cost information to your insurance company. Furthermore, contractors who bypass your deductible might compromise the quality of repairs, using subpar materials or cutting corners, which could lead to more extensive repairs in the future.

<p-color-red>Verifying Deductible Payment and Ensuring Protection<p-color-red>

Insurance companies can ask for evidence of your deductible payment before releasing the full claim amount. This could involve presenting a canceled check, money order receipt, credit card statement, or a copy of the payment arrangement with the contractor.

<p-color-red>Protecting Yourself from Fraudulent Practices<p-color-red>

1. Opt for local contractors and verify their contact details.
2. Request and validate references, and check online for any complaints or negative reviews.
3. Exercise caution with contractors who approach you door-to-door.
4. Obtain multiple bids and be wary if one bid is significantly lower than the others.

<p-color-red>Responding to Offers to Waive Deductibles<p-color-red>

If a contractor proposes waiving your deductible, consult your insurance company and consider reporting the incident to the Texas Attorney General's Consumer Protection Hotline at 800-621-0508. Contractors engaging in this illegal practice could face fines or legal action.

Source: Original content available at <p-color-red>[Texas Department of Insurance]<p-color-red>.

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