Roy Cooper signs law protecting North Carolinians from predatory roofing practices

Just in time for summer, when North Carolinians along the coast begin warily watching eastward for Atlantic hurricanes, Gov. Roy Cooper has signed a law protecting state residents from predatory roofing scams that often appear when storm clouds have passed. 

Senate Bill 124, which Cooper signed on Thursday, provides a five-day cancellation period after an insurance claim is denied, during which contractors cannot collect payment for contracted work. 

“This bipartisan legislation is an important step to provide necessary protections for North Carolinians and helps ensure that residents across the state are protected from unethical businesses which prey upon vulnerable people, particularly after storms when they need help the most.”

The provision is aimed specifically at residential roof replacement and repair contracts that are often necessary after violent summer storms, including hurricanes, roll into the North Carolina Coast.

Under the new law, contracts for residential roof replacement or repair are subject to a five-business day cancellation period following an insurance claim denial for the work to be performed under the contract. 

Contractors who have performed emergency services needed to prevent further damage to property are entitled to collect for that work but nothing further. Violations are punishable as a Class 1 misdemeanor. Other than payment received for work performed to prevent further damage, the contractor could not begin work or collect any payment during the five-day period.

The new law, which takes effect Oct. 1, also caps the commission for referral of insurance business by an unlicensed individual to an insurance agent or broker at $50. Charging anything more for a referral could incur maximum fines of $2,000 per violation. The limitation does not apply to title insurance. 

The Atlantic hurricane season runs from June 1 to November 30 and forecasters are predicting the 2024 season will be especially active. 

Fraud is common in the wake of large storms, according to North Carolina Insurance Commissioner Mike Causey. Storm victims should beware of roofing and contractor scams that pop up during reconstruction and cleanup efforts, Causey said. On its website, the state Insurance Commission urges working only with licensed contractors and has more information on how to avoid fraud and scams.

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