Free Roof Scam

Here is an example of how the Free Roof Scam works

An insurance 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. The Insurance company withheld $2,500 in Recoverable Depreciation which 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 companys 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.

Along comes "Joe Roofer" who only charges the Homeowner/Insured $9500 and waives the full deductible amount or uses an advertising agreement.

"Joe 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 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.

In this scenario, "Joe Roofer" 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 Roofer" is happy and the Homeowner/Insured is happy, because they just received a "FREE ROOF" and paid a lot less than they were supposed to. The Homeowner/Insured is thinking, "Hey, it s OK; everyone does it, right?" WRONG! ITS A FELONY! For "Joe Roofer" AND for the Homeowner/Insured!!!

On the other hand, if "Joe Roofer" were to send in a final invoice with the dollar figure of $9,500 total invoice charged to the Homeowner/Insured and NOT $11,000, then the insurance company would then back off their final check by the amount that "Joe Roofer" did NOT collect. In this scenario, which is legal, "Joe Roofer" 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.

Questions to consider ...
  • Do you think maybe 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 Roofer sends off a false invoice showing a higher dollar amount collected then what was actually collected from Homeowner/Insured, Joe Roofer has committed insurance fraud. If the Homeowner/Insured signed that form too, then so have they.

And it can get worse!

Fact: If Joe Roofer provides an invoice (or receipt) to the Homeowner/Insured and the Homeowner/Insured then signs it and faxes itto the insurance company, not only have both parties committed insurance fraud, the Homeowner/Insured has now also committed wire fraud AND collusion (conspiring to perform an illegal act).

How nice! Joe Roofer has just dragged the Homeowner/Insured down right along with them.

Due to the amount of recent storm damage claims in Texas and shady roofing company practices, Insurance companies are now auditing 1 out of every 3 claims. If you profit in any way from your insurance claim (such as not paying your deductible, or pocketing any insurance money) you and possibly your contractor are committing fraud. Your paperwork from the insurance company clearly states what laws apply to your claim, so there is no I didn t know excuse.

Since roofing is by its very nature is dangerous and potentially deadly, these kickbacks can beconsidered a first degree felony offense. At the minimum, its a state jail felony. If you or Joe Roofer get caught doing it multiple times, they can aggregate the charges. All it takes is one angry neighbor, an insurance company s Special Investigation Unit to audit the insured, or the Texas Department of Insurance to investigate.

Fact: If a roofing company wants to pay you for placing a sign in your yard as an advertising agreement, this is in fact considered a rebate since you actually received a betterment from your loss in the State of Texas. Would Joe Roofer pay the same amount as your insurance deductible to place a sign in a stranger s yard, or someone s yard that they are not re-roofing? While it is legal, it is also not very likely.

How to avoid scams and illegal activity It is actually quite simple!
  • Find a QUALITY roofing contractor that has good references and that you think will provide you with the highest level of service and highest level of integrity.
  • Let the contractor negotiate the cost of your roof replacement while you pay your full and 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 help you finance it. If not then maybe you need to rethink your premiums. Remember that a higher premium will mean a lower deductible, but YOU the consumer, are the one who makes that choice.


Remember, when its time, call Kime!
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