I have similar statements in my contract, and everything he has stated is correct and exactly what he is entitled to. You get to keep nothing, and in fact, owe your deductible to him by law. HOWEVER, I do not see anything in there that says he is asking for any of that money ‘up front’. Many contractors want the ACV payment as a down payment in addition to your deductible check/payment at contract signing. I would feel uncomfortable handing that amount over for nothing more than a piece of paper and a promise the materials will be delivered and installed. I need to get something (though I often sign contracts with no money down and a promise from the homeowner to give me a deductible amount check on delivery of materials), so I limit my request for money to just the deductible. It needs to be paid, the insurance needs proof it WAS paid (by law in Texas), and it’s typically less than the ACV payment.
If it helps, look at this like a doctor visit. You show up to their office, check-in and pay your co-pay (another name for deductible) of $0-100 depending on your insurance plan. Your insurance will pay your doctor the rest of the bill YOU OWE from the doctor’s office $500-10K or more. In this scenario, who receives the deductible? A: The doctor/roofer.
Also, beware of contractors/roofers suggested by your insurance carrier - anything that benefits the insurance IS NOT necessarily in YOUR benefit. Please remember a contractor working for the insurance has worked out with the insurance to keep costs low resulting in a tighter profit margin. To counter the lower margin, the likelihood of using cheaper, lower cost products on YOUR roof goes way up. Work with an independent contractor of YOUR choosing with products YOU want. On this last point, insurance companies are only required to indemnify you (return the damage to pre-damage condition) which means they aren’t paying for upgrades, you are. If you have a 25-year shingle, they aren’t paying for a 30-year to replace it. However, I routinely INCLUDE upgrades AT NO EXTRA COST TO YOU. This does mean I am taking money out of my pocket to provide this to you, but if you have signed my contract agreeing to abide by it’s lawful terms, I have no problem providing you a quality roof you’ll be happy with and I can make a good to fair profit on.
Hope this helps and best of luck. It’s best not to look at the insurance money as ‘your’ money. yes, they’re paying it to you, but it’s for the services your contractor (doctor) is providing. Also, ask your contractor about change orders and references.