While working in my basement, I often don’t hear the soft fingered taps on my front door. Fortunately, I have two dogs who alert me when someone is at the front door. The conversation with local storm chaser roofing companies is almost always the same. They appear out of the brush whenever a few marbles of hail descend upon the Colorado roof tops along the Front Range. Not to take anything away from the damage that hail can do to a roof, there is sufficient evidence that Colorado’s high winds, violent thunderstorms and golf ball sized hail can put a dent in just about anything, but when it comes to salespeople pandering on my front porch, I am always well-armed with questions. Of course it helps that I work with legitimate roofers and thus can tell the difference.
A common practice by both legitimate (as far as I can tell) and non-legitimate roofing companies is to offer “deductible free” roofing. In other words, they offer a free roof by covering your insurance deductible. This is a bit of a gray area as to legality and ethical behavior. While we all understand the free market opportunists, we must also consider who will be at fault if something someone else does on our behalf is illegal. So is a free deductible roof legal? Good question.
As a homeowner, you have a contract with your insurance provider that should cover you for damage to your roof from hail, wind, snow, tornadoes and etcetera. As part of your insurance, you pay a premium which is in part calculated with a deductible in mind. Your agreement is between you and the insurance provider (and not between the roofer and your insurance provider). Here lies the first question, “How does the roofer guy at the door know what my insurance provider will allow?” Simply stated, they don’t know and they are playing on your ignorance. When a roofing company suggests that they will cover your deductible or exchange your deductible for advertising (putting a sign on your lawn), they are walking a fine line of ethical behavior.
First of all, in order to cover the full expense of the roof, the roofer must fib a little on the insurance claim (which they are more than happy to do for you), so ask the question – “How do you get the insurance company to cover the deductible?” They will have a nice song and dance prepared about how “everyone does it” and “it’s a common thing” and “no-one ever says anything about it”. All of these statements could be true, but just because the roofers haven’t been caught, doesn’t make the practice legal. Fibbing on an insurance claim is fraud. Here’s the kicker – if the insurance company finds out, they will come after you – not the roofer. Remember, your insurance contract is between you and the insurance company. The roofer who completes your claim is simply an agent working on your behalf.
The exchange for advertising ploy is just a cover to make you feel good about scamming the insurance company, and let’s face it, no-one likes insurance companies to begin with, so getting something for nothing seems reasonable. But at the end of the day, you have a piece of litter in the yard that tells everyone who put up your new roof. As a side note, if you agree to trade advertising for the cost of your deductible, the roofer may be able write off the advertising as a business expense and claim you as the recipient of the deductible amount (consequently your deductible just became income subject to taxes).
So why risk it? Obviously, it’s a personal choice on your behalf and a business choice on the behalf of the roofing contractor. But at the end of the day, the roofer has their money from the insurance company and you have a roof. If you’re lucky, nothing ever comes of it and you have successfully skirted the system. If you’re not lucky, who knows, maybe the insurance company will let you slide… or maybe they won’t.