Most homeowners hear one sentence about SB38: “contractors cannot waive deductibles.” That is true, but incomplete. Colorado’s residential roofing statutes also control contract structure, rescission mechanics, and payment handling.
This is the compliance architecture that directly affects claim quality and dispute risk.
What SB38 Actually Governs
Colorado’s residential roofing provisions in Title 6, Article 22 cover:
- Required written contract elements before roofing work begins
- Specific notices in insurance-funded jobs
- Rescission rights after claim denial
- Trust handling for owner payments/deposits
- Prohibition on deductible waiver/rebate promises
Required Contract Elements (Operational Checklist)
Under C.R.S. 6-22-103, the contract should include at least:
- Scope of roofing services and materials
- Approximate service dates
- Approximate costs based on known damage
- Contractor contact details
- Surety/liability insurer identification (if applicable)
- Cancellation/refund policy language
- Mandatory insurance deductible disclosure statement
Why this matters for claim outcomes
A compliant contract improves carrier confidence that scope negotiations are technical, not transactional. Noncompliant contracts increase scrutiny and slow approvals.
Deductible Waiver Prohibition (C.R.S. 6-22-105)
If payment is from a property/casualty claim, a roofing contractor cannot advertise or promise to pay/waive/rebate the deductible.
Practical red flags
- “Free roof” marketing
- “We’ll absorb your deductible”
- Unexplained invoice discount tied to deductible amount
In real-world claim handling, these tactics can undermine estimate credibility and create avoidable legal exposure.
Rescission Rights After Denial (C.R.S. 6-22-104)
When the claim is denied in whole or part, homeowners may have a narrow rescission window.
Timing mechanics
- Homeowner can rescind within 72 hours after written denial notice
- Notice can be electronic, mail, or personal delivery per statute
- Contractor generally must return payments/deposits within statutory timelines, subject to allowable offsets for actual work performed
Process control
Treat denial receipt as a clock start. Log exact timestamp, send rescission notice with proof of delivery, and archive confirmation.
Trust-Fund Handling Requirement
Statutory language also requires the contract to state that owner payments are held in trust until materials are delivered or majority work is performed.
For homeowners, this is a fraud-prevention control. For contractors, it is a compliance control.
Boundaries: Contractor vs Public Adjuster Activity
Colorado law separates roofing scope discussions from claim-adjustment authority.
Safe lane for contractors
- Discuss repair scope, code, materials, and construction pricing
- Provide technical documentation for claim support
Risk lane
- Acting as if they are adjusting coverage entitlements
- Filing or negotiating claims as the policyholder’s legal representative without proper licensure
SB38 + Claims Strategy: How to Use the Law Correctly
1) Use compliance language proactively
Request a contract walkthrough that maps each required statutory element.
2) Keep denial and rescission documentation clean
Use one folder and one timestamp standard for all notices.
3) Align claim file and contract file
Your contract scope and your supplement scope should be logically consistent.
4) Separate pricing debates from coverage debates
Construction scope documentation is strongest when it stays technical.
Audit Template for Homeowners
Before signing, confirm all of the following are present in writing:
- Required contract items (scope/dates/cost/contact)
- Deductible non-waiver disclosure
- Rescission statement with statutory timing
- Trust-funds statement
- Signature blocks and execution date
If any item is missing, pause and correct before work starts.
Sources
Educational only, not legal advice. For legal interpretation, consult licensed Colorado counsel.