The Truth Behind "Free Roofs" and AOB

Written by: Steven Burns

It’s time to get real about the “free roof” sales tactic some roofing companies are pushing across our state. Here’s the scenario:

Some John Doe Roofer shows up knocking at your front door a day or two after the first mild rainstorm of spring. Before engaging with the man, you look past him and see a utility pick up truck parked adjacent to your house, and it dawns on you that you’ve seen this truck and perhaps even the man at your door driving around your neighborhood over the past day or so. He introduces himself as a roofer working for one of the finest outfits in the industry, X-Roofers. He comments on the storm you had a couple nights ago, and says he is willing to do a FREE inspection of your roof to assess any “damages” that may have occurred as a result of recent storm activity. He also reiterates that "all of your neighbors are getting new roofs" as well. He rattles off some slick statistics, and even notably cites a Florida statute mandating that if more than 25% of a roof in our state is damaged, it must be fully replaced and brought up to code (FL Statute 708.1.1). Intrigued by the roofer’s endeavor and comforted by the no-charge inspection offering, you allow the roofer to conduct the inspection. Approximately 20 minutes later, the man returns and announces that you have sustained “moderate damage” to your roof as a result of a windstorm and are eligible for a FREE ROOF and swiftly has you sign on the dotted line, making no mention of deductibles or the specifics of your policy.

This is an accurate depiction of situations we've unfortunately become increasingly atune to across the entire state. We've recently seen an uptick of these claims being filed in The Villages and all along the West Coast. One thing all of these properties in question have had in common were 14-16-year-old shingle roofs at the end of their useful life.

One thing we want to make clear at DIG is that we are not here to adjudge if a client should or should not file a claim and we are certainly not here to turn down any client that is wanting to file a claim as that it what insurance is here for. What we are tasked with, however, is equipping our clients with the best, most accurate information so that you can make an educated and measured decision on what is best for you and your home.

The fact is that the idea that the roof replacement on offer in our above example is “free” is wildly off base. Insurance companies in Florida are being financially decimated by these sorts of claims, and this doesn’t stop at roof replacement. The term ‘Assignment of Benefits (AOB)’ may sound familiar, the process by which an insured signs over their policy to a third party (usually a contractor) during a claim, giving that third party full control of the policy. An article last year aptly describes how this plays out:

“A homeowner calls a contractor to fix some non-weather-related water damage. The contractor gets the homeowner to sign an 'assignment of benefits (AOB)' form, which gives the contractor the right to recover payments directly from the insurer. The contractor then submits an invoice for far more than the damage is worth and threatens to sue the insurer (usually without the homeowner’s knowledge or consent) when the claim is denied” (Pociask).

AOB is one of the primary reasons Florida homeowners insurance rates are skyrocketing, as insurers seek to increase rates to offset the extraordinary cost of AOB complications during claims. At the end of the day it is up to the insured to make informed decisions during the claims process and be wary of predatory contractors and attorneys.

Below are some tips to abide by to help you avoid falling victim to AOB and shady third parties should you find yourself in need of filing a claim:

1. Call your agent first. They will go over your policy and confirm your deductibles and specific coverage surrounding the type of claim to be filed. They will also be able to provide you with insight to the claims process, what to expect and could provide you with recommendations of trust worthy companies that past clients have used. We are always here to advise, assist, and help you make an informed decision on what is best for you and your home.

2. Get a second opinion. If you ever feel pressured and hurried by a contractor or roofer as we described above, that should be an immediate red flag. We've seen second opinions on roofs resulting in no claim needing to be filed while confirming that 2-3 years of roof life exist.

3. Be aware of insurance fraud. Promises of free roofs and such almost always mean insurance fraud. As one of our trusted carrier partners has suggested, often times third parties offer to pay your deductible for you to get the claims process started. This is fraudulent. Also know that a home's general wear and tear (including roofs) as it ages is NOT covered by your insurance policy as only damages caused by named perils are.

4. Read what you're signing. NEVER sign anything from a contractor without reading through it first. Nefarious contractors will often slide an AOB contract in front of the insured to sign when they are at their most vulnerable, the very beginning of a claim. If you can’t understand the verbiage on anything you’re signing, call your agent so that we can assist you.

Although Florida Legislature passed the AOB Reform Bill effective July 2019, there are still loopholes. Until Florida lawmakers step in to curb this form of "legal fraud," the consumer is on the front lines in this fight.