Texas policyholders can no longer cut deals with storm repair
contractors to pocket their deductibles for storm repairs. The
Texas Legislature has amended the Texas Insurance Code and Texas
Business & Commerce Code, targeting construction companies that
offer "free roofs" and "waived deductibles" as
enticements to policyholders. Previously, for example, contractors
would reach an agreement to perform work for a policyholder, but
waive or absorb the portion of the repair cost equal to the
deductible. This waiver or absorption could occur through numerous
paperwork tricks. Now, the policyholder must pay its deductible,
otherwise the insurer can refuse to pay certain claims and the
contractor can be charged with a crime.
