Colorado Senate Bill 38 (SB38) was passed to protect homeowners from predatory roofing practices common after major storms. Understanding this law helps you identify trustworthy contractors and avoid fraud.

The Deductible Waiver Prohibition

The most important provision of SB38: Roofing contractors cannot waive, pay, rebate, or promise to waive all or part of your insurance deductible.

Why This Matters

An insurance claim payment is calculated as:

Replacement Cost - Deductible = Net Check

If a contractor accepts the net check as full payment (waiving your deductible), they’re signaling that the true cost was lower than the invoiced amount. This constitutes insurance fraud.

Red Flags to Watch For

  • “Free roof” offers
  • “We’ll handle the deductible”
  • “Deductible assistance” programs
  • Any suggestion that you won’t pay your deductible

Legitimate contractors may offer financing to help manage deductible payments, but the deductible must be paid by you.

Mandatory Contract Provisions

SB38 requires specific language in all roofing contracts:

Scope and Cost Transparency

The contract must state:

  • The scope of work
  • The cost based on damages known at signing
  • Cannot be open-ended without defined parameters

The 72-Hour Right of Rescission

You have the right to cancel your roofing contract within 72 hours after receiving notice that your insurance claim has been denied (in whole or in part).

Why This Protects You: You’re not locked into paying for a roof out-of-pocket if insurance funding fails. It de-risks signing a contract contingent on approval.

Trust Obligations

Contractors must hold any deposit or payment in trust until:

  • Materials are delivered to the site, OR
  • A majority of work is performed

This prevents contractors from taking deposits and disappearing.

The Public Adjuster Boundary

SB38 reinforces the distinction between contractors and public adjusters:

Contractors Can:

  • Discuss physical scope of repairs (“Code requires 24 inches of ice and water shield”)
  • Discuss pricing (“Market rate for labor is $85/square”)
  • Provide technical documentation

Contractors Cannot:

  • File claims on your behalf
  • Negotiate policy coverage
  • Discuss policy interpretation (“Your policy owes X”)

When a contractor argues about policy provisions rather than construction requirements, they may be crossing into unauthorized public adjusting.

How to Verify Compliance

Ask potential contractors:

  1. “Will you waive my deductible?” (Compliant answer: No)
  2. “Who files the claim?” (Compliant answer: You do)
  3. “What if my claim is denied?” (Should mention rescission rights)
  4. “How do you hold deposits?” (Should explain trust requirements)

Choosing a Compliant Contractor

Look for contractors who:

  • Clearly explain SB38 provisions
  • Never mention deductible waivers
  • Frame arguments as technical requirements, not policy demands
  • Provide written contracts with required provisions
  • Have local roots and established reputation

SB38 exists to protect you. Working with compliant contractors ensures your claim is handled properly and your home is restored with quality workmanship.