Although insurance company lobbyists were successful yesterday in passing Senate Bill 38, homeowners, public adjusters and roofers can still make their voice heard by calling or emailing Governor Hickenlooper, and informing him why he should veto the bill.
Senate Bill 38 should be vetoed because it actually harms consumers, and contains few consumer protections. Insurance companies successfully convinced some legislators that the bill was about preventing unscrupulous roofers from waiving insurance deductibles. However, waiving a deductible is already prohibited under Colorado law (see CRS 18-13-119.5 related to Abuse of Property Insurance), and its insertion in this bill is a red herring. This bill is fundamentally about giving insurance adjusters more power to control the scope of work– and that is why the insurance companies drafted the bill and pushed it so hard. The bill directly increases insurers’ profits by allowing them to control the scope of work on every residential roof in Colorado.
The bill passed due to a flawed process. Insurers refused to bring other groups to the table, and left consumer advocates out of the drafting entirely. Neither the Division of Regulatory Agencies, nor the Division of Insurance was brought into the drafting process—again, likely because those agencies would have advocated for consumers. The bill sailed through the senate because insurance companies kept it “under the radar.” Not one consumer advocacy group testified at senate committee or on the senate floor. Thereafter, the insurance lobby delayed the committee hearing, and quickly moved the bill from House sponsor Representative Vaad, over to Representative Priola when consumer groups and roofers became aware of the bill and began objecting to it.
Finally, on April 29, the bill came up on the House floor but was tabled, to be heard the following day. For unknown reasons, the bill was unexpectedly brought back up on the House floor the same day, April 29, after roofers, public adjusters and consumer advocates had left for the day. The bill passed, but the 20 votes against the bill came from both republicans and democrats. The entire process was flawed and was dominated by the insurance lobby. As of April 29, the insurance lobby had at least twelve lobbyists pushing the bill.
Insurance companies are not consumer advocates, and this is a bad bill. Insurers drafted this bill to give their insurance adjusters even more power than they already have. In the last section of the bill, specifically 6-22-105 (2)(A), it is the insurance adjuster who gets to make the determination as to whether the roofer has violated a law and attempted to waive a deductible, and it is the insurance adjuster who gets to then refuse to consider the scope of work from that roofer. This wording creates an incredible new power for an insurance adjuster who may be just out of high school or just out of adjuster’s school, and who may know little about roofs, or roofers’ bids and scopes of work.
Consumers will ultimately suffer when insurance adjusters are given this new, increased power to control the scope of work on the consumer’s home roof repairs.
Some final notes:
- Not one consumer advocacy group backed this bill. Consumer advocacy groups, like United Policyholders, a non-profit, non-partisan consumer advocacy group, wanted the bill amended or voted down.
- Sections 6-22-101 through 6-22-104 provide some protections for consumers. However the last section, 6-22-105, provides no protection for consumers and actually burdens homeowners with even less protection—leaving homeowners to fight both their insurance company, and unscrupulous roofers.
- This bill forces homeowners to carry the burden of prosecuting unscrupulous roofers—yet most homeowners don’t have the financial ability to hire a lawyer, nor the time to fight roofers and their insurers.