An adjusters written estimate for an insurance claim on a roof is estimated to be $11,000 to replace what was damaged. This is called the Replacement Cost Value or (RCV).

The Homeowner / Insured has an insurance deductible of $1,500 plus the Insurance company withheld $2,500 in Recoverable Depreciation.

Recoverable Depreciation is money that will be paid back to the insured only when ALL the repairs are completed and the total cost of replacement is at least the full RCV amount or $11,000.
This means the insurance company’s first payable check or portion of “buying the roof” is $7,000. This is called the Actual Cash Value or (ACV). The Actual Cash Value is the value of your property/roof after depreciation.

Joe the Roofer

Along comes “Joe the Roofer” who only charges the Homeowner / Insured $9500.00 & Waives the full deductible amount or uses an advertising agreement.

“Joe the Roofer” then sends an invoice to the insurance company stating that they collected $1,500 from the Homeowner / Insured or that the total invoice to the insured was the full $11,000. (RCV)

“Joe the Roofer” is telling the insurance company they should release the remaining $2,500 in recoverable depreciation.

The insurance company now thinks the Homeowner / Insured has satisfied their $1,500 deductible.

“Joe the Roofer” in this scenario got paid the initial $7,000 ACV check plus the recoverable depreciation check of $2,500 for a total of $9,500 to replace the Homeowner / Insured’s roof.

“Joe the Roofer” is happy and Homeowner / Insured is happy, because they just received a FREE ROOF and paid a lot less than they were supposed to (“hey, it’s OK; everyone does it, right?). WRONG IT’S A FELONY! For the Homeowner / Insured and “Joe the Roofer”!!!

On the other hand, if “Joe the Roofer” were to send in a final invoice with the dollar figure of $9,500.00 total invoice charged to the Homeowner / Insured & NOT $11,000, then the insurance company would then back off their final check by the amount that “Joe the Roofer” did NOT collect.

“Joe the Roofer” in this scenario which is legal, got paid a total of $8,000 to replace the Homeowner / Insured’s roof.

This still is $3,000 less than a QUALITY roofing company should have gotten paid to replace the roof.

Do you think maybe that “Joe the Roofer” had to cut a few corners on your roof to make a profit?
Will “Joe the Roofer” be in business in one, two or five years from now when you have problems?

Fact: The very moment “Joe the Roofer” sends off a false invoice showing a higher dollar amount collected then what was actually collected from Homeowner / Insured, then “Joe the Roofer” has committed insurance fraud, if Homeowner / Insured signed that form then so have they.

Fact: If “Joe the Roofer” provides an invoice (or receipt) to the Homeowner / Insured & the Homeowner / Insured then signs it and faxes it to the insurance company, both parties have now committed insurance fraud, however the homeowner has also committed wire fraud AND they are also committing collusion (conspiring to perform an illegal act). …How nice; “Joe the Roofer” has just dragged the homeowner down right along with them.

Fact: If a roofing company wants to pay you for placing a sign in your yard in the State of Texas, it is in fact considered a rebate since you actually received a betterment from your loss.

Would “Joe the Roofer” pay the same amount $ as your insurance deductible to place a sign in a strangers yard, or someone’s yard that they are not re-roofing? If they are then please send them my way. This would be legal but it’s also not very likely.

It’s really quite simple:? Find a QUALITY roofing contractor that has good references & that you think will provide you with the highest level of service and highest level of integrity. Let them negotiate the cost of your roof replacement and pay your full & legally required deductible. You are only required to pay your deductible: the insurance company will take care of the rest.

If you have a problem with your deductible, maybe the QUALITY roofing company can finance it. If not then maybe you need to rethink your premiums.

A higher premium will mean a lower deductible, but YOU, the consumer, are the one who makes that choice.
Since roofing is by its very nature is dangerous and potentially deadly these kickbacks can be considered a first degree felony offense. At the minimum it’s a state jail felony. If you or “Joe the Roofer” get caught doing it multiple times they can aggregate the charges. All it takes is one angry neighbor, an insurance companies Special Investigation Unit to audit the insured, or the Texas Department of Insurance to investigate.

Insurance Fraud

Educate Yourself!

Waiving Deductibles, Discounting Deductibles, Sign Allowances….It’s All Against The Law!

It is illegal in the State of Texas for your Roofing Contractor to pay any portion of your deductible
When a final invoice is submitted to the insurance company to recover depreciation does your roofing contractor show that you paid your deductible, when in fact you did not?

Does your roofing contractor disclose to your insurance company how much of your deductible was covered/waived, if not all of it, on a completion form to your insurance company?

When a roofing contractor follows the law and discloses on the final invoice, that the insured’s deductible was actually “COVERED”, “WAIVED”, or “DISCOUNTED”, then the insurance company would reduce the recoverable depreciation by the amount of the discounted deductible. Therefore the insured or the roofing company would be paid less money.

Maybe the roofing contractor uses an “ADVERTISING AGREEMENT” to trade for your deductible. Either way, if a roofing contractor follows the law and discloses that hundreds or even thousands less than the actual deductible, is collected then the insurance company would reduce the recoverable depreciation by the amount of the discounted or bartered deductible.]
(As found on