On June 30, 2011, Governor Jay Nixon signed a bill into law that intends to curb unscrupulous roofing sales tactics. Before working for the Better Business Bureau, I was a roofer for eight years. Roofing paid my way through my first two years of college and I remember my time in the sun fondly. With my experience as a roofer and complaint analyst for the BBB, I realized that a law was inevitable because of the behavior of a considerable number of roofing companies--some local businesses, some out-of-area stormchasers.
The new law prohibits contractors from advertising or promising to pay any amount of an insurance deductible. It extends the consumer's right of rescission (right to cancel contract) from three days to five days, when concerning insurance claims. This must be printed in the contract. If the contract is cancelled, the contractor must return any payments to the customer within ten days. This prevents businesses from purchasing materials for the job and then demanding payment within a couple days of entering a contract. The most important part of the law forbids contractors from representing or negotiating with an insurance carrier on behalf of the homeowner. The Kansas City Better Business Bureau has warned roofing companies to avoid this business tactic for more than a year. It is a sad occasion where the industry could not regulate itself and the legislature was forced to act.
Roofers negotiating with homowners' insurance carriers became commonplace when an unscrupulous company called American Shingle brought their tactics to Missouri from their headquarters in Atlanta. Even though we warned businesses not to adopt their methods, roofers felt compelled to do so to remain competitive. We issued a warning to consumers stating, "A business with a vested interest in getting your money should not have power to make home repair decisions for you. Whether or not the company's intentions are honorable, there is no need to take such steps for a roof. It is your money and your home. If you don't feel qualified to make decisions about home repair, find a trusted individual and ask them to do it for you."
Roofers informed homeowners that they would deal directly with insurance companies, making sure that insurance adjusters did not miss any damage. This never made sense, because it is the roofer's responsibility to provide the EXACT SAME information in a formal estimate, which the homeowner could then turn over to the insurance company. Getting an estimate gives the homeowner the chance to get other estimates and feel no obligation to file a claim with the insurance company if the damage is minor. Roofers asked homeowners to sign a contract in advance of any bid and to file an claim with their insurance companies. This caused problems when insurance companies would deny claims, even with the "help" of the roofer present during the appraisal. These claims counted against the homeowners' policies and they received nothing but wasted time (sometimes homeowners would have to pay their deductible to fix minor issues, and it still counted against their policy). Roofers frequently pointed out issues that were not important or not caused by hail. Many stormchasers breezed through town and had homeowners file claims with their insurance company for hail damage even though the area had not received hail for years. Worst of all, several roofers had in their contract, no matter how much money was approved by the insurance company, the checks would be paid directly to the roofer. If the cost of the roofing job fell thousands of dollars below payout, the roofers kept the difference. Some stormchasers went as far as cutting corners to make the difference larger. American Shingle was in possession of 3000 such payouts when they went out of business, leaving thousands of customers with damaged roofs, no money to fix them, and a higher insurance payment.
Innumerable roofers gave consumers the impression that insurance companies would stiff them if they didn't have a roofer present during the appraisal. Many are still making that claim (in the comments). First of all, homeowners can provide a company's written estimate to the insurance company in advance (or three companies' written estimates, which the adjuster prefers). Therefore the insurance adjuster must address why they will not cover something that needs to be repaired. Also, even if the insurance company tries to stiff the homeowner, the insurance industry is highly regulated. The homeowner can report their activity to the Missouri Department of Insurance. No such higher regulatory authority exists to specifically regulate roofers.
The new law may not be popular with some roofing companies, especially stormchasers, but it should also be easy to comply with it. The roofing industry will essentially revert back to the way it was before American Shingle came in and messed it all up.