<< Back

NEW STORM DAMAGE NOTICE REQUIREMENTS

Brodie Miller

Residential contractors who provide home repair or improvement services to be paid by insurance proceeds should be aware of new legislation in Minnesota that went into effect as of August 1, 2018.

Per Minnesota Statute § 325E.66, residential contractors are prohibited from paying, directly or indirectly, all or any part of a customer’s insurance deductible or offering to compensate a customer for their deductible, as an inducement for the customers to enter into a contract with the contractor.

As of August 1, 2018, residential contractors are now required to provide written notice regarding this prohibition within their initial estimate.  While the exact notice language is not provided within the revised statute, the following provision could be incorporated into a residential contractor’s initial estimate form to comply with the statute:

A residential contractor providing home repair or improvement services to be paid by an insured from the proceeds of a property or casualty insurance policy shall not, as an inducement to the sale or provision of goods or services to an insured, advertise or promise to pay, directly or indirectly, all or part of any applicable insurance deductible or offer to compensate an insured for providing any service to the insured.  If a residential contractor violates this section, the insurer to whom the insured tendered the claim shall not be obligated to consider the estimate prepared by the residential contractor.”

The Minnesota Department of Labor and Industry has suggested that written notice of the statutory prohibition should also be incorporated into a residential contractor’s contract.

To ensure compliance with the revised statute, all residential contractors providing insurance work should review their current documents and ensure that their initial estimate forms and contracts for insurance work are properly updated with the requisite notice.

© 2018 All Rights Reserved Rinke Noonan Ltd.