House Bill 2102: Tips to Remain Compliant
Texas House Bill 2102, which goes into effect on September 1, 2019, is sending waves throughout the roofing and insurance restoration industry in Texas. The following are a few tips to assist you with compliance:
- You must add the following to your contract in bold, 12-pt (or greater) font and preferably on page 1:
“Texas law requires a person insured under a property insurance policy to pay any deductible applicable to a claim made under the policy. It is a violation of Texas law for a seller of goods or services who reasonably expects to be paid wholly or partly from the proceeds of a property insurance claim to knowingly allow the insured person to fail to pay, or assist the insured person’s failure to pay, the applicable insurance deductible.”
- We recommend that you post a copy of the law in your main office or other area where you post other legal notices, i.e. wage law notices (see HB 2102 below).
- We also recommend that you add the following to your agreements with your independent contractor sales people/project managers:
“Contractor represents and warrants that he or she has reviewed, understands, and will fully comply with Texas House Bill 2102, effective September 1, 2019, which provides that it is unlawful to (i) pay, waive, absorb, or otherwise decline to charge or collect the amount of an insured’s deductible; (ii) provide a rebate or credit in connection with the sale of the good or service that will offset all or part of the amount paid by the insured as a deductible; or (iii) in any other manner assist the insured in avoiding monetary payment of the required insurance deductible.”
If you have any questions or would like to discuss, please feel free to call us at (972) 239-6200 or e-mail Chris@psmclaw.com.
Below is exact wording of H.B. 2102:
H.B. No. 2102
AN ACT relating to the payment of insurance deductibles related to
property insurance policies; creating a criminal offense.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle F, Title 5, Insurance Code, is amended
by adding Chapter 707 to read as follows:
CHAPTER 707. PAYMENT OF INSURANCE DEDUCTIBLE
Sec. 707.001. DEFINITIONS. In this chapter:
(1) "Person" means an individual, corporation,
association, partnership, limited liability company, or other
legal entity.
(2) "Property insurance policy" means an insurance
policy issued by an insurer, including a county mutual insurance
company, farm mutual insurance company, Lloyd's plan, or reciprocal
or interinsurance exchange, that provides first-party coverage for
loss of or damage to real property.
Sec. 707.002. PAYMENT OF DEDUCTIBLE REQUIRED. A person
insured under a property insurance policy shall pay any deductible
applicable to a first-party claim made under the policy.
Sec. 707.003. CONSUMER EDUCATION. The department, in
coordination with other state agencies and stakeholders as
necessary, shall develop and implement an education program related
to the payment of property insurance policy deductibles. The
program must:
(1) provide reasonable methods to educate insurance
consumers and providers of goods or services that are regularly
paid for from proceeds of property insurance claims; and
(2) include information regarding:
(A) the requirements of this chapter and Section
27.02, Business & Commerce Code; and
(B) the conduct prohibited by Section 27.02,
Business & Commerce Code.
Sec. 707.004. REASONABLE PROOF OF PAYMENT. An insurer that
issues a property insurance policy with replacement cost coverage
may refuse to pay a claim for withheld recoverable depreciation or a
replacement cost holdback under the policy until the insurer
receives reasonable proof of payment by the policyholder of any
deductible applicable to the claim. Reasonable proof of payment
includes a canceled check, money order receipt, credit card
statement, or copy of an executed installment plan contract or
other financing arrangement that requires full payment of the
deductible over time.
Sec. 707.005. RULEMAKING. The commissioner may adopt rules
as necessary to implement this chapter. Section 2001.0045,
Government Code, does not apply to rules adopted under this
SECTION 2.
Section 27.02, Business & Commerce Code, is
amended to read as follows:
Sec. 27.02. GOODS OR SERVICES PAID FOR BY INSURANCE
PROCEEDS: PAYMENT OF DEDUCTIBLE REQUIRED
(a) In this section, "property insurance
policy" has the meaning assigned by Section 707.001, Insurance
Code.
(b) A contract to provide a good or service that is
reasonably expected to be paid wholly or partly from the proceeds of
a claim under a property insurance policy and that has a contract
price of $1,000 or more must contain the following notice in at
least 12-point boldfaced type: "Texas law requires a person
insured under a property insurance policy to pay any deductible
applicable to a claim made under the policy. It is a violation of
Texas law for a seller of goods or services who reasonably expects
to be paid wholly or partly from the proceeds of a property
insurance claim to knowingly allow the insured person to fail to
pay, or assist the insured person's failure to pay, the applicable
insurance deductible."
(c) A person who sells goods or services commits an offense
if the person:
(1) advertises or promises to provide a good or
service to an insured under a property insurance policy in a
transaction in which:
(A) the good or service will be paid for by the
insured from the proceeds of a property insurance claim; and
(B) the person selling the good or service will,
without the insurer's consent:
(i) pay, waive, absorb, or otherwise
decline to charge or collect the amount of the insured's
deductible;
(ii) provide a rebate or credit in
connection with the sale of the good or service that will offset all
or part of the amount paid by the insured as a deductible; or
(iii) in any other manner assist the
insured in avoiding monetary payment of the required insurance
deductible; or
(2) provides a good or service to an insured under a
property insurance policy knowing that the insured will pay for the
good or service with the proceeds of a claim under the policy and,
without the insurer's consent:
(A) pays, waives, absorbs, or otherwise declines
to charge or collect the amount of the insured's deductible;
(B) provides a rebate or credit in connection
with the sale of the good or service that offsets all or part of the
amount paid by the insured as a deductible; or
(C) in any other manner assists the insured in
avoiding monetary payment of the required insurance deductible.
(d) An offense under this section is a Class B [A]
misdemeanor.
SECTION 3. The changes in law made by this Act to Section
27.02, Business & Commerce Code, apply only to an offense committed
on or after the effective date of this Act. An offense committed
before the effective date of this Act is governed by the law in
effect on the date the offense was committed, and the former law is
continued in effect for that purpose. For purposes of this section,
an offense was committed before the effective date of this Act if
any element of the offense occurred before that date.
SECTION 4. Section 27.02(b), Business & Commerce Code, as
amended by this Act, applies only to a contract entered into on or
after the effective date of this Act.
SECTION 5. This Act takes effect September 1, 2019.