Louisiana lawmakers advanced a bill Wednesday that would prohibit roofing contractors from assisting homeowners with insurance claims. It would also stop insurance adjusters from performing construction work in connection with the claims they handle.
House Bill 121, sponsored by Rep. Roy Daryl Adams, D-Jackson, unanimously cleared the House Committee on Insurance and goes next to the floor for consideration. The proposal is one of dozens that lawmakers have filed, with the backing of insurance companies, in an effort to try to lower coverage premiums in the state.
The bill intends to prevent conflicts of interest with adjusters who are also residential contractors. It would also prohibit roofing contractors from providing, advertising or soliciting insurance claims handling services for their customers. Roofers would further have to end the use of contingency contracts in which they agree to perform work only if the homeowner’s insurance company approves the cost.
Adams said he hopes his measure will stop contractors from going door to door after a storm to talk homeowners into filing insurance claims for roof work.
Several committee members praised the bill and asked Adams to amend it so that it applies to all types of construction contractors and subcontractors. However, several roofers testified in opposition to the proposal.
Josh Lovell, a sales manager with Gator Roofing in Baton Rouge, said the bill would essentially make it illegal for him to help customers with a task they often want help with. Insurance companies will sometimes deny claims and leave homeowners unaware that they can challenge the denial or ask for a second opinion, which contractors can provide, he said.
“If we can’t even talk about any of the process, then you’re just giving all the power to the insurance company,” Lovell said. “And do you trust insurance companies like that?”
Johnathan Davis, a board member with the Residential Roofing Association of Louisiana, said contingency agreements and working with insurance companies are a vital part of his profession.
“I know there are good and bad companies just like every industry,” Davis said. “I think that this would hurt everybody — not just the bad actors.”
Committee Chairman Gabe Firment, R-Pollock, who works as an insurance consultant, said it’s wrong for contractors to assist homeowners with insurance claims because it’s not within their area of expertise.
“That is outside of what you’re licensed to do,” Firment said. “There’s other avenues for the homeowner to take if there’s a dispute.”
There is a “big problem” with shady contractors in the roofing industry who find damage where none actually exists, Firment added.
“I think we’ve got to get back to roofers being tradesmen and not salesmen,” he said.
Rep. Chance Henry, R-Crowley, who owns an insurance agency, echoed Firment’s statements, pointing out that homeowners can hire public adjusters to handle any disputes that might arise. Public adjusters are independent claims assessors whom policyholders can hire for a fee to represent their interests as opposed to adjusters who work on behalf of insurance companies.
Davis with the roofers’ association challenged the lawmakers’ stance, saying adjusters are experts in interpreting insurance policies but are not generally the most knowledgeable on roof construction and damage assessments. Many homeowners are hesitant to hire a public adjuster because it can be costly, usually escalates the claim and adds another layer to the process, he said.
The bill’s provisions are so ambiguous, according to Davis, they could make it illegal for roofers just to send damage estimates to an insurance adjuster.
“I don’t want to be in court one day defending sending an … estimate to an adjuster,” he said.
Lovell said he would be afraid to even say the word “insurance” in the presence of a customer if the bill becomes law.
Hearing their concerns, Firment said the bill might need to be amended to better define some provisions so roofers aren’t blocked from offering some of their routine services.
Correction: State law does not allow public adjusters to charge a fee based on a percentage of the claim. A previous version of this article misstated that compensation structure. We apologize for the mistake.