A new bill is making its way through the Oklahoma legislative process that could impact policyholders and the roofing industry in Oklahoma. On March 3, by a vote of 77 to 11, the Oklahoma House of Representatives passed House Bill 1940, which would prohibit roofing contractors from waiving or paying any part of an insured’s deductible when the funds for repairing or replacing a roof come from an insurance company as a result of a property damage claim. The current form of the Bill was authored by Representative Kyle Hilbert and Senator James Leewright, and the Bill currently states:
A residential or commercial roofing contractor providing repairs or improvement services to be paid by an insured from the proceeds of a property or casualty insurance policy shall not, as an inducement to the sale or provision of goods or services to an insured, advertise or promise to pay, directly or indirectly, all or part of any applicable insurance deductible or offer to compensate an insured for providing any service to the insured.1
This means roofers will be statutorily prohibited from covering or paying an insured’s deductible, waiving an insured’s deductible, or finding alternative ways of reducing the cost of an insured’s roof to match the amount of the deductible. Thus, the current version of House Bill 1940 prohibits roofing contractors from discounting the price of a new roof by the deductible amount if the insured agrees to place a sign in their yard advertising the name of the roofer’s business. It also prohibits roofing contractors from offering a “free roof” to insureds or reducing an invoiced amount by the amount of the insured’s deductible.
As a penalty for violating this law, according to the current version of the Bill, the insurance company may refuse to consider the roofing contractor’s estimate. This would impact the roofing contractor’s ability to get paid and the timeline for the policyholder to complete necessary work on the insured roof. Importantly, this penalty is civil in nature, not criminal, and it gives the power to the insurer to determine whether it believes the roofing contractor has violated the provisions of the statute.
The current version of House Bill 1940 also places a burden upon both the roofing contractor and the adjuster or insurer to ensure the policyholder is adequately informed. In the Bill’s current form, every roofing contractor must notify the insured in writing of the provisions of the statute (assuming this Bill becomes a statute). Such notification must accompany the initial estimate. Likewise, the adjuster or insurer handling the insurance claim must notify the insured in writing of the statutory provisions at the time the adjuster or insurer provides the insured with a copy of the initial claim estimate.
The current version of House Bill 1940 can be found here, and it was introduced to the Senate on March 4. It is possible the Senate will pass the Bill as currently worded, but it is also possible the Senate will make changes to the Bill. Alternatively, the Senate could decide to not pass the Bill, and if that happens then the Bill will not become law. We will follow the status of House Bill 1940 as it continues to move through the legislative process, and we’ll inform you of any substantive changes to the Bill as the process moves forward. In the meantime, if you are interested in tracking the Bill, you can follow it through the Oklahoma State Legislature’s website.2 If the Senate passes House Bill 1940 in its current form, then the provisions of the Bill will become effective on November 1, 2021.
1 H.B. 1940, 57th Leg., 2d Sess. (Okla. 2021).