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Waiving your deductible usually means someone misstates the cost of the job to your insurer, which is insurance fraud, and some states also ban the offer outright. Get every bid on the same written scope, compare real prices, and ask your insurer and an attorney before you accept any offer that touches your deductible.

This page is general information, not legal advice.

Why is waiving a deductible usually insurance fraud?

Under a replacement cost value (RCV) policy, the insurance company owes you the actual cost of the repair, minus the deductible (subject to your policy’s terms and limits). It’s your duty to report the actual cost of the job to the insurance company, and it’s their job to write a check or checks that total the cost of the job, minus your deductible. So if a contractor does the repair for $20,000 and your deductible is $1,000, you tell the insurance company that it cost $20,000. They pay you $20,000 minus your $1,000 deductible. So you pay the contractor $19,000 from the insurance company and $1,000 from your own pocket.

It’s really simple to see that this is insurance fraud if you do it yourself. Let’s say you negotiate an additional $1,000 off the price of your job. Now your contractor charges you $19,000. If you send your $19,000 invoice to the insurance company, they deduct your $1,000 and send you a check for $18,000 and you are still out $1,000. But you don’t want to pay your deductible. So you doctor up the invoice from your contractor and send your insurance company an invoice that says it cost $20,000 to do the work. Because of your lie, the insurance company sends out $19,000 and you save $1,000.

I’m not offering legal advice here. But if you don’t understand how lying to an insurance company to get more money could impact your freedom, then I would highly recommend speaking to an actual, licensed attorney.

Now let’s look at how a roofing contractor “waives” a deductible. The only difference here is that the contractor doctors the invoice instead of you. So the contractor will send the insurance company an invoice on your behalf. That invoice shows that the contractor charged you $20,000. The insurance company sends you $19,000 and the contractor only actually charges you $19,000. So now instead of you lying directly to your insurance company to get the money, your contractor worked with you to lie to your insurance company.

There’s a legal term for that as well that you should ask your attorney about. But I’m still not offering legal advice here.

This isn’t to say that your deductible can’t be waived. It is 100% within your insurance company’s discretion to treat your scenario differently. Some adjusters will release the full amount of the claim without reviewing an invoice. Some adjusters have released the full amount of the claim even though the homeowner installed a much cheaper product. But in all these scenarios, the homeowner was honest with the insurance company.

A wrapped truck and a hammer means someone might be qualified to do your roof. It doesn’t mean they are qualified to counsel you on the ins and outs of insurance fraud. The industry is full of people who are convinced they can outsmart the law without ever picking up a law book.

What does an offer to waive a deductible look like?

A deductible offer is any promise that the contractor will cover, pay, discount or make up the part of a loss that your policy leaves you to pay. It can be said outright, or it can arrive as a rebate, a credit, a gift, a referral payment or a free upgrade, often before anyone has priced the work.

How it is offered What you may hear What to ask
Absorbing it “We will take care of your deductible,” or “you will not pay anything out of pocket.” What is the full price of the work, and where in the contract is it written?
A rebate or credit A promise to pay the amount back to you later, or to take it off a future bill. Is the promise in the written contract, and what is the price before the rebate?
A gift or payment A bonus, a gift card, a referral fee, or a payment for a sign in your yard. Why is anything being paid to me, and is it written down?
A bigger number on paper An estimate or invoice that is higher than the work costs, so the paperwork seems to cover the deductible. Can you show me how each line was priced?
A “free” upgrade An upgrade or add-on offered in place of the deductible. What is the upgrade priced at in the contract, and what does the base price include?

Why is a deductible offer a red flag?

The offer is about who you hire, not what the work costs. If you are not paying a cost, it has to come from somewhere else in the deal. That is why the offer makes the real price hard to see and makes bids hard to compare, and why some states have written rules about it.

  • The money has to come from somewhere. The Texas Department of Insurance says: “The contractor then cuts corners, uses lower quality products, or inflates the bill sent to the insurance company to cover the difference.”
  • You cannot compare it. A bid with a hidden adjustment prices a different job from a bid without one. You compare the totals and do not know what each total includes.
  • It asks you to choose before you see the price. A promise made at your door, before a written scope exists, gives you a reason to sign. It does not give you a price.

What can I do instead of accepting the offer?

Decline the offer and ask for the price of the work only. Get bids from several contractors on the same written scope, compare them line by line, and sign a written contract that shows the full price. Ask your insurer how your deductible works, and ask an attorney if you want legal advice.

  1. Tell the contractor you want the price of the work, with no deductible offer attached.
  2. Get bids from more than one contractor, each on the same scope of work.
  3. Compare the bids line by line. Our roofing bid worksheet and our guide to reading a contractor estimate show how.
  4. Make sure the written contract shows the real price of the work and every promise the contractor made. If a promise is not in the contract, it is only words.
  5. Ask your insurer when and how your deductible applies. Your policy and your insurer answer that question.

Our guide on getting multiple bids on a roof insurance claim covers the bid step in more detail.

Which states have a law about waiving a deductible?

25 states have a law in force that bars a contractor, or in a few states any seller, from paying, waiving or rebating a homeowner’s insurance deductible. Virginia’s law takes effect January 1, 2027. In the other states we found no statute specific to contractors. That does not make the practice legal, and the fraud explanation above still applies. What happens after a violation varies: a crime, a consumer-protection violation, a void contract, or an insurer that may disregard the contractor’s estimate.

State Law in force? Citation Who it covers What the law says it leads to
Alabama No contractor-specific statute found — — —
Alaska No contractor-specific statute found — — —
Arizona Yes A.R.S. 32-1158.02 Licensed contractors doing storm-damage repair License suspension or revocation
Arkansas No contractor-specific statute found None enacted. A 2025 bill, HB 1308, would have banned it but did not pass as far as we could find — —
California Yes Cal. Penal Code 551(a), (b), (c) Contractors, and their employees or agents, doing repair or replacement of homes and commercial buildings, and auto repair dealers. It bars knowingly offering or giving a discount intended to offset an insurance deductible. Exception: no violation where the insurer has determined the claim amount and the work follows that determination or insurer-accepted estimates A public offense. Over $950: 16 months, 2 or 3 years under Penal Code 1170(h), a fine up to $10,000, or both; or up to one year in county jail, a fine up to $1,000, or both. All other cases ($950 or less): up to six months in county jail, a fine up to $1,000, or both
Colorado Yes C.R.S. 6-22-105 Roofing contractors Insurer may disregard the estimate; owner or insurer may sue
Connecticut No contractor-specific statute found — — —
Delaware No contractor-specific statute found — — —
District of Columbia No contractor-specific statute found — — —
Florida Yes Fla. Stat. 817.234(7)(d); 489.147 Contractors and people acting for them Third-degree felony; discipline and fines up to $10,000 per violation
Georgia Yes (applies to “persons committing” the act; sits in the public-adjuster law) O.C.G.A. 33-23-43(c)(4), (d), (e) Public adjusters and “persons committing” the act Misdemeanor; license suspension or revocation
Hawaii No contractor-specific statute found — — —
Idaho No contractor law found (a related general law covers other services) — — —
Illinois Yes 815 ILCS 513/18(b) Home repair and remodeling contractors Consumer fraud violation; owner may sue for damages
Indiana Yes IC 24-5-11-10.5 Real property improvement suppliers Deceptive act; attorney general or consumer may sue
Iowa Yes Iowa Code 103A.71 Residential contractors Contract void; unlawful practice
Kansas No contractor-specific statute found — — —
Kentucky Yes KRS 367.628 Contractors and their representatives Attorney general or injured person may sue; civil penalty up to $5,000 per violation
Louisiana Yes La. R.S. 51:451 Anyone selling goods or services Fine up to $500, up to 30 days in jail, or both
Maine No contractor-specific statute found — — —
Maryland Yes Md. Code, Ins. 27-407.2 Home repair and remodeling contractors (with intent to defraud an insurer) Felony at $300 or more; misdemeanor below $300
Massachusetts No contractor-specific statute found — — —
Michigan No contractor-specific statute found — — —
Minnesota Yes Minn. Stat. 325E.66 Residential roofers, builders and remodelers Insurer may disregard the estimate; insured or insurer may sue
Mississippi Yes Miss. Code 75-24-307(4)(b) Residential roofing contractors Consumer-protection penalties; owner may sue
Missouri Yes RSMo 407.725 Contractors doing roof or exterior work Unfair practice under the merchandising practices act
Montana No contractor-specific statute found Related rule only: MCA 30-14-225 Auto glass and auto repair businesses; home contractors are not named Unfair and deceptive act
Nebraska Yes Neb. Rev. Stat. 44-8604 Residential contractors Contract void
Nevada No contractor-specific statute found — — —
New Hampshire No contractor-specific statute found — — —
New Jersey No contractor-specific statute found — — —
New Mexico No contractor-specific statute found — — —
New York Yes N.Y. Gen. Bus. Law 771-b Roofing contractors No penalty stated in the section; a general penalty section may apply
North Carolina No contractor-specific statute found — — —
North Dakota Yes N.D.C.C. 26.1-39.2-03 Residential contractors Contract void
Ohio No contractor-specific statute found — — —
Oklahoma Yes 59 O.S. 1151.30 Roofing contractors Insurer may disregard the estimate; complaints go to state officials
Oregon No contractor-specific statute found — — —
Pennsylvania No contractor-specific statute found — — —
Rhode Island No contractor-specific statute found — — —
South Carolina Yes S.C. Code 40-59-25(E) Residential builders and contractors Misdemeanor; license suspension or revocation
South Dakota Yes SDCL 37-24-50 Residential roofing contractors Contract null and void
Tennessee No contractor-specific statute found — — —
Texas Yes Tex. Bus. & Com. Code 27.02 Anyone selling goods or services paid from a claim (without the insurer’s consent) Class B misdemeanor
Utah Yes Utah Code 13-50-302 Residential contractors doing wind or hail repair Assignment of the claim to the contractor is void
Vermont No contractor-specific statute found — — —
Virginia Enacted; takes effect Jan. 1, 2027 Va. Code 59.1-618 Contractors Prohibited practice under the Consumer Protection Act
Washington No contractor law found (a related general law covers other services) — — —
West Virginia Yes W. Va. Code 46A-6M-5 Roofing contractors Misdemeanor (fine up to $5,000, jail up to one year); owner or insurer may sue
Wisconsin Yes Wis. Stat. 100.65 Residential contractors Forfeiture of $500 to $1,000 per violation
Wyoming Yes W.S. 40-12-702 Contractors soliciting storm-damage repair Unlawful trade practice remedies

We read each state’s code in October 2026. Laws change; check your state’s current code, insurance department or attorney general, or ask an attorney.

This is general information, not legal advice.

What should I ask a contractor who offers to cover my deductible?

Ask every contractor the same questions in writing and keep the answers with your bids. The goal is to see the real price of the work and every promise made, in writing, so that you can compare the bids side by side before you choose. These questions work for any offer, not only a deductible offer:

  • What is the full price of the work, before any offer, credit or rebate?
  • Where in the written contract does that price appear?
  • Is every promise you have made to me in the contract?
  • What does the bid include and leave out, line by line?
  • Are you offering anything to me, or to anyone else, for signing with you?
  • Will you put the same price in writing for the same scope that other contractors are bidding on?

Where Otter Quotes fits

Otter Quotes creates a written scope of work for your project and sends it to multiple contractors. Every bid is on the same scope, so you compare the same job. You compare the bids online, next to reviews and licensing information, without a salesperson visiting your home.

Because contractors know they are competing, they are more likely to include better materials and warranties. Otter Quotes is not a contractor, does not sell upgrades and does not work with your insurance company. Contractors pay Otter Quotes a fee on the accepted bid.

Get my bids today

Frequently asked questions

Can a contractor waive my insurance deductible?

Even where no state law names it, having the cost of the job misstated to your insurer is usually insurance fraud. On top of that, 25 states have a law that addresses a contractor paying, waiving or rebating a deductible, and Virginia’s starts in 2027. See the table above, then ask your insurer, your state’s insurance department or an attorney.

Is a deductible rebate the same as a waiver?

Several state laws cover both. Some reach a promise to “pay or rebate” a deductible, others name a “rebate or credit,” and some also list gifts, coupons, bonuses and referral fees. Whatever the offer is called, ask for the price of the work in writing.

What if the contractor calls it a discount instead?

Several state laws list an allowance or a discount against the contract price among the acts they cover when it is offered as a way to pay or rebate a deductible. A new name does not settle the question. Ask the contractor to show the full price of the work in the written contract, then ask your insurer or an attorney.

Why not take the offer if it keeps money in my pocket?

Taking the offer usually means the cost of the job is misstated to your insurer, which is insurance fraud. Your insurer owes you the actual cost of the repair minus your deductible (subject to your policy’s terms and limits), and you are expected to report that cost honestly. The Texas Department of Insurance also says bad contractors often use this offer, then cut corners or inflate the bill. Ask an attorney if unsure.

How do I compare contractors if one offers to cover the deductible?

Set the offer aside and compare the work. Get bids from several contractors on the same written scope, put the bids side by side line by line, and check that the contract states the full price. Otter Quotes creates the written scope and sends it to multiple contractors, so every bid prices the same job.

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