Contingency Agreements Valid?


I’d love to hear from you. thanks. Mark. Company is Authentic Restoration.


If the homeowner gives a contractor assignment of the claim, the contractor now owns the claim. Repeat: OWNS THE CLAIM. Insurance companies can try to fight that but if the assignment form is drafted correctly and you are in a state where assignment of claim is recognized legislatively, they will lose that battle every single time.


I’m in a similar situation as OP. We did do some research on our roofing company and had every intention of using them, especially when they helped get us additional funds for some siding work. Unfortunately, in nine months time they have been unable to give us a clear bid/scope of work for what we are requesting to accompany the siding (full house instead of just two sides, some trim repair). We tried to separate the roof from siding so that we could get the roof done sooner and we were met with a nasty reply accusing us of balking at the siding work. We have regularly sent emails explaining what we need clarified in the bid and they do not answer our questions. Every few weeks we get asked “When can you meet so we can get your project into production?” to which we offer times to meet and then reiterate our questions. Still no answers. Our initial contract is only about the insurance process and states 1/3 of claim amount if we do not use them. This amounts to over $8k! My gut says they aren’t actually interested in our business. Our roof needs attention. I want to get out of this contract and fix my house in a timely manner. After months of trying, can I just walk away? Offer them a sum (likely closer to $1,200) and part ways? I’m very tempted to contact our insurance commission, the BBB, Angie’s list, etc.


Any valid contract contains a clause that discusses the time frame the work has to start and complete within. Of course, that always has some contingencies based on weather, natural disasters, etc. which doesn’t seem to be your issue.

I fully suspect the contract you have with them isn’t valid and wouldn’t hold up in court. Did you sign a 3 day right of rescission? If they didn’t offer that, the contract is invalid in most states simply because of that. Contingency contracts period haven’t shown to hold up in court well. Yeah, the Contractor may threaten a lot but if they take you to court with an invalid contract, you can countersue for a frivolous lawsuit and they could end up paying all your attorney fees and court costs.

Take the contract to an attorney, spend a couple of hundred dollars, have him send them a formal letter of contract cancellation and move on.


I’m not a fan of the contingency, even though I have used them in the past. Like @Authentic_Dad said, a contract is better. I sign them up for the original scope amount, then list any supplements and put Supplement amount, TBD, so you have a contract that changes as the scope of work changes.

And homeowners, don’t have me meet your adjuster then not let me do the work. I have good results with adjusters and can get more paid for than what you are expecting sometimes. That is my knowledge and skill you now don’t want to pay me for. I just got used.


I see how old this post is but it depends what state you are in. Co, I’m not sure but let me say this. You had zero issue with the guy meeting with your insurance company, you had zero issue singing the contingency. Had you been in my home state PA and you reniged on my contingency after I met your insurance adjuster, did my own scope and estimate to present to the adjuster and then told me you weren’t comfortable and to kick rocks I’d take you to court as I have done numerous times and gotten every penny my contract entitles me to from you. You can not expect people to work for free, help you in a situation and then not uphold your end. It’s unethical. Call us what you may stop chaser whatever it’s a legitimate billion dollar industry we are in and although I despise most of my competitors they run legitimate businesses. Some states require a dollar amount on the contingency, I have one on my even though my state does not require it but they never give me every dollar i.ask for so my estimate is always higher than the insurance company anyway. But you can not ethically have people go to bat and work for you and just tell them to kick rocks. People like you are just damn ignorant.


Hey trying to work up a contingency agreement similar to what you’re explaining. Any chance you would share your agreement with me?


I’m sorry, we have close to $10K over time, in legal fees, getting our contracts/documents to where they are now. I don’t think it makes sense to just give that away.


Totally agree. Would you be willing to sell a copy of it?


I’m in on this auction!


Possibly. You’d still want to take everything to a local Attorney that is familiar with business law in the State you’re working in. Things can vary slightly. For example, the 3 day right of rescission is not the 3 day right of rescission on some states. It’s actually 10 days in 1 state we work in.


The fact is simple, you should always check a roofers credentials, but I dont think that’s the issue here. You specifically stated that you liked the deal the insurance company gave you better, and common sense tells me that means you want to profit which on insurance is a felony. Yes it is a ton of work, time, gas, etc. helping some of the scumbags, I mean ex clients I’ve run across who let you do all the work and then go with someone even less than desirable who would be willing to lie on the final invoice. Thank you fortune that your getting a new roof for the price of the deductible, man up and pay to have the work done.and donl proposals dont mean squat when it comes to insurance, the end result is the same, someone has to send the final invoice, and if you do it honest then the work should be for the full amount plus the deductible. Its folks like you and homeowners like this that drive the price down for honest hard working insurance mitigation specialists/roofers.


It’s not a felony in every state and sadly, the reality is, it is rarely prosecuted. I think the insurance companies turn a blind eye because most of the contractors so incompetent that they have to give away deductibles are equally incompetent in supplementing. So it works out cheaper for the IC’s.