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House Study Bill 33 - IntroducedA Bill ForAn Act 1relating to residential contractors and repair or
2services performed on residential real estate covered
3by property and casualty insurance, and making penalties
4applicable.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 103A.71, Code 2019, is amended to read
2as follows:
3103A.71 Residential contractors.
41. This section may be cited as the “Insured Homeowner’s
5Protection Act”.
61. 2. As used in this section, unless the context otherwise
7requires:
8a. “Catastrophe” means a natural occurrence including but
9not limited to fire, earthquake, tornado, windstorm, flood, or
10hail storm, which damages or destroys residential real estate.
11b. a. “Residential contractor” means a person in the
12business of contracting to repair or replace residential
13roof systems or perform any other exterior repair, exterior
14replacement, or exterior reconstruction work resulting from a
15catastrophe on residential real estate or a person or offering
16to contract with an owner or possessor of residential real
17estate to carry out such work. do any of the following:
18(1) Repair or replace a roof system or perform any other
19exterior repair, replacement, construction, or reconstruction
20work on residential real estate.
21(2) Perform interior or exterior cleanup services on
22residential real estate.
23(3) Arrange for, manage, or process the work referred to in
24subparagraph (1) or (2).
25(4) Serve as a representative, agent, or assignee of the
26owner or possessor of residential real estate.
27c. b. “Residential real estate” means a new or existing
28building, including a detached garage, constructed for
29habitation by one to four families.
30d. c. “Roof system” means and includes roof coverings, roof
31sheathing, roof weatherproofing, and roof insulation.
322. 3. A residential contractor shall not advertise or
33promise to rebate any insurance deductible or any portion
34thereof as an inducement to the sale of goods or services. A
35promise to rebate any insurance deductible includes granting
-1-1any allowance or offering any discount against the fees to be
2charged or paying a person directly or indirectly associated
3with the residential real estate any form of compensation,
4except for items of nominal value. A residential contractor
5may display a sign or any other type of advertisement on a
6person’s premises provided the person consents to the display
7and the person receives no compensation from the residential
8contractor for the placement of the sign or advertising.
93. 4. A residential contractor shall not represent or
10negotiate on behalf of, or offer or advertise to represent or
11negotiate on behalf of, an owner or possessor of residential
12real estate on any insurance claim in connection with the
13repair or replacement of a roof systems system, or the
14performance of any other exterior repair, exterior replacement,
15or exterior reconstruction work on the residential real estate.
164. a. A residential contractor contracting to provide
17goods or services to repair damage resulting from a catastrophe
18shall provide the person with whom it is contracting a fully
19completed duplicate notice in at least ten-point bold type
20which shall contain the following statement:
21NOTICE OF CONTRACT OBLIGATIONS AND RIGHTS
22You may be responsible for payment to (insert name of
23residential contractor) for the cost of all goods and services
24provided whether or not you receive payment from any property
25and casualty insurance policy with respect to the damage.
26Pursuant to Iowa law your contract with (insert name of
27residential contractor) to provide goods and services to
28repair damage resulting from a naturally occurring catastrophe
29including but not limited to a fire, earthquake, tornado,
30windstorm, flood, or hail storm is void and you have no
31responsibility for payment under the contract if (insert name
32of residential contractor) either advertises or promises to
33rebate all or any portion of your insurance deductible, or
34represents or negotiates, or offers to represent or negotiate,
35on your behalf with your property and casualty insurance
-2-1company on any insurance claim relating to the damage you have
2contracted to have repaired. Your signature below acknowledges
3your understanding of these legal obligations and rights.
4...........
5Date
6...........
7Signature
8b. The notice shall be executed by the person with
9whom the residential contractor is contracting prior to or
10contemporaneously with entering into the contract.
115. A post-loss assignment by a named insured of rights
12or benefits to a residential contractor under a property and
13casualty insurance policy insuring residential real estate
14shall be subject to all of the following requirements:
15a. The assignment shall only authorize a residential
16contractor to be named as a co-payee for the payment of
17benefits under a property and casualty insurance policy
18covering residential real estate.
19b. The assignment shall include all of the following:
20(1) An itemized description of the work to be performed.
21(2) An itemized description of the materials, labor, and
22fees for the work to be performed.
23(3) A total itemized amount to be paid for the work to be
24performed.
25c. The assignment shall include a statement that the
26residential contractor has made no assurances that the claimed
27loss will be fully covered by an insurance contract and shall
28include the following notice in capitalized fourteen point
29type:
30YOU ARE AGREEING TO GIVE UP CERTAIN RIGHTS YOU HAVE UNDER
31YOUR INSURANCE POLICY. PLEASE READ AND UNDERSTAND THIS
32DOCUMENT BEFORE SIGNING.
33THE ITEMIZED DESCRIPTION OF THE WORK TO BE DONE SHOWN IN THIS
34ASSIGNMENT FORM HAS NOT BEEN AGREED TO BY THE INSURER. THE
35INSURER HAS THE RIGHT TO PAY ONLY FOR THE COST TO REPAIR OR
-3-1REPLACE DAMAGED PROPERTY CAUSED BY A COVERED PERIL.
2d. The assignment shall not impair the interest of a
3mortgagee listed on the declarations page of the property
4and casualty insurance policy which is the subject of the
5assignment.
6e. The assignment shall not prevent or inhibit an insurer
7from communicating with the named insured or mortgagee listed
8on the declarations page of the property and casualty insurance
9policy that is the subject of the assignment.
10f. A copy of the executed assignment shall be provided to
11the insurer of the residential real estate within five business
12days after execution of the assignment.
13g. The named insured has the right to cancel the assignment
14for any reason within five business days from the date the
15assignment is executed. The cancellation must be made in
16writing. Within ten business days of the date of the written
17cancellation, the residential contractor shall tender to the
18named insured, the land owner, or the possessor of the real
19estate, any payments, partial payments, or deposits that have
20been made by such person.
216. Any written contract, repair estimate, or work order
22prepared by a residential contractor to provide goods or
23services to be paid from the proceeds of a property and
24casualty insurance policy shall include the following notice
25in capitalized fourteen point type, which shall be signed by
26the named insured, and sent to the named insured’s insurance
27company prior to payment of proceeds under the applicable
28insurance policy:
29IT IS A VIOLATION OF THE INSURANCE LAWS OF IOWA TO REBATE
30ANY PORTION OF AN INSURANCE DEDUCTIBLE AS AN INDUCEMENT TO THE
31INSURED TO ACCEPT A RESIDENTIAL CONTRACTOR’S PROPOSAL TO REPAIR
32DAMAGED PROPERTY. REBATE OF A DEDUCTIBLE INCLUDES GRANTING
33ANY ALLOWANCE OR OFFERING ANY DISCOUNT AGAINST THE FEES TO
34BE CHARGED FOR WORK TO BE PERFORMED OR PAYING THE INSURED
35POLICYHOLDER THE DEDUCTIBLE AMOUNT SET FORTH IN THE INSURANCE
-4-1POLICY. THE INSURED POLICYHOLDER IS PERSONALLY RESPONSIBLE FOR
2PAYMENT OF THE DEDUCTIBLE.
35. 7. A contract entered into with a residential contractor
4is void if the residential contractor violates subsection 2, 3,
5or 4 any provision of this section.
66. 8. a. A residential contractor violating this section
7is subject to the penalties and remedies prescribed by this
8chapter.
9b. A violation of subsection 2 3 or 3 4 by a residential
10contractor is an unlawful practice pursuant to section 714.16.
11EXPLANATION
12The inclusion of this explanation does not constitute agreement with
13the explanation’s substance by the members of the general assembly.
14This bill relates to residential contractors and repair
15or services performed on residential real estate covered by
16property and casualty insurance.
17Current law requires a residential contractor contracting to
18provide goods or services on residential real estate to provide
19notice to the person with whom they are contracting that such
20person will be responsible for the cost of all goods and
21services provided, regardless if the person receives payment
22from any property and casualty insurance. The notice must also
23provide that the contract is void if the contractor promises
24to rebate any portion of the person’s insurance deductible, or
25negotiates, or offers to negotiate, with the person’s insurance
26company.
27The bill requires that the notification prohibiting a
28contractor’s rebate of a deductible be included in any written
29contract, repair estimate, or work order, and be signed by the
30named insured. A copy of such notification must be sent to the
31named insured’s insurer prior to the payment of any proceeds
32under the applicable insurance policy.
33The bill requires a notice regarding responsibility for the
34cost of all goods and services be included in any post-loss
35assignment of rights and benefits by a named insured to a
-5-1residential contractor under a property and casualty insurance
2policy that covers residential real estate. The assignment
3must also include an itemized description of the work to be
4performed, and of the cost of the materials, labor, and fees
5for the goods or services to be provided.
6A copy of the assignment must be provided to the insurer
7within five business days after execution. The assignment
8cannot prevent the insurer from communicating with the
9named insured or mortgagee listed on the declarations page
10of the policy that is the subject of the assignment. The
11named insured can cancel the assignment for any reason
12within five business days from the date of execution of the
13assignment. Within 10 business days of the date of the written
14cancellation, the residential contractor must return to the
15named insured, the owner, or the possessor of the residential
16real estate, any payments or deposits that have been made by
17such person.
18A residential contractor who violates a provision of the
19bill is subject to penalties and remedies pursuant to Code
20chapter 103A. In addition, a contractor who advertises a
21rebate or promises to rebate a named insured’s deductible to
22induce a sale, or represents or negotiates with an insurer
23on behalf of a named insured, commits a consumer fraud and
24is subject to criminal and civil penalties pursuant to Code
25section 714.16.
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2services performed on residential real estate covered
3by property and casualty insurance, and making penalties
4applicable.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 103A.71, Code 2019, is amended to read
2as follows:
3103A.71 Residential contractors.
41. This section may be cited as the “Insured Homeowner’s
5Protection Act”.
61. 2. As used in this section, unless the context otherwise
7requires:
8a. “Catastrophe” means a natural occurrence including but
9not limited to fire, earthquake, tornado, windstorm, flood, or
10hail storm, which damages or destroys residential real estate.
11b. a. “Residential contractor” means a person in the
12business of contracting to repair or replace residential
13roof systems or perform any other exterior repair, exterior
14replacement, or exterior reconstruction work resulting from a
15catastrophe on residential real estate or a person or offering
16to contract with an owner or possessor of residential real
17estate to carry out such work. do any of the following:
18(1) Repair or replace a roof system or perform any other
19exterior repair, replacement, construction, or reconstruction
20work on residential real estate.
21(2) Perform interior or exterior cleanup services on
22residential real estate.
23(3) Arrange for, manage, or process the work referred to in
24subparagraph (1) or (2).
25(4) Serve as a representative, agent, or assignee of the
26owner or possessor of residential real estate.
27c. b. “Residential real estate” means a new or existing
28building, including a detached garage, constructed for
29habitation by one to four families.
30d. c. “Roof system” means and includes roof coverings, roof
31sheathing, roof weatherproofing, and roof insulation.
322. 3. A residential contractor shall not advertise or
33promise to rebate any insurance deductible or any portion
34thereof as an inducement to the sale of goods or services. A
35promise to rebate any insurance deductible includes granting
-1-1any allowance or offering any discount against the fees to be
2charged or paying a person directly or indirectly associated
3with the residential real estate any form of compensation,
4except for items of nominal value. A residential contractor
5may display a sign or any other type of advertisement on a
6person’s premises provided the person consents to the display
7and the person receives no compensation from the residential
8contractor for the placement of the sign or advertising.
93. 4. A residential contractor shall not represent or
10negotiate on behalf of, or offer or advertise to represent or
11negotiate on behalf of, an owner or possessor of residential
12real estate on any insurance claim in connection with the
13repair or replacement of a roof systems system, or the
14performance of any other exterior repair, exterior replacement,
15or exterior reconstruction work on the residential real estate.
164. a. A residential contractor contracting to provide
17goods or services to repair damage resulting from a catastrophe
18shall provide the person with whom it is contracting a fully
19completed duplicate notice in at least ten-point bold type
20which shall contain the following statement:
21NOTICE OF CONTRACT OBLIGATIONS AND RIGHTS
22You may be responsible for payment to (insert name of
23residential contractor) for the cost of all goods and services
24provided whether or not you receive payment from any property
25and casualty insurance policy with respect to the damage.
26Pursuant to Iowa law your contract with (insert name of
27residential contractor) to provide goods and services to
28repair damage resulting from a naturally occurring catastrophe
29including but not limited to a fire, earthquake, tornado,
30windstorm, flood, or hail storm is void and you have no
31responsibility for payment under the contract if (insert name
32of residential contractor) either advertises or promises to
33rebate all or any portion of your insurance deductible, or
34represents or negotiates, or offers to represent or negotiate,
35on your behalf with your property and casualty insurance
-2-1company on any insurance claim relating to the damage you have
2contracted to have repaired. Your signature below acknowledges
3your understanding of these legal obligations and rights.
4...........
5Date
6...........
7Signature
8b. The notice shall be executed by the person with
9whom the residential contractor is contracting prior to or
10contemporaneously with entering into the contract.
115. A post-loss assignment by a named insured of rights
12or benefits to a residential contractor under a property and
13casualty insurance policy insuring residential real estate
14shall be subject to all of the following requirements:
15a. The assignment shall only authorize a residential
16contractor to be named as a co-payee for the payment of
17benefits under a property and casualty insurance policy
18covering residential real estate.
19b. The assignment shall include all of the following:
20(1) An itemized description of the work to be performed.
21(2) An itemized description of the materials, labor, and
22fees for the work to be performed.
23(3) A total itemized amount to be paid for the work to be
24performed.
25c. The assignment shall include a statement that the
26residential contractor has made no assurances that the claimed
27loss will be fully covered by an insurance contract and shall
28include the following notice in capitalized fourteen point
29type:
30YOU ARE AGREEING TO GIVE UP CERTAIN RIGHTS YOU HAVE UNDER
31YOUR INSURANCE POLICY. PLEASE READ AND UNDERSTAND THIS
32DOCUMENT BEFORE SIGNING.
33THE ITEMIZED DESCRIPTION OF THE WORK TO BE DONE SHOWN IN THIS
34ASSIGNMENT FORM HAS NOT BEEN AGREED TO BY THE INSURER. THE
35INSURER HAS THE RIGHT TO PAY ONLY FOR THE COST TO REPAIR OR
-3-1REPLACE DAMAGED PROPERTY CAUSED BY A COVERED PERIL.
2d. The assignment shall not impair the interest of a
3mortgagee listed on the declarations page of the property
4and casualty insurance policy which is the subject of the
5assignment.
6e. The assignment shall not prevent or inhibit an insurer
7from communicating with the named insured or mortgagee listed
8on the declarations page of the property and casualty insurance
9policy that is the subject of the assignment.
10f. A copy of the executed assignment shall be provided to
11the insurer of the residential real estate within five business
12days after execution of the assignment.
13g. The named insured has the right to cancel the assignment
14for any reason within five business days from the date the
15assignment is executed. The cancellation must be made in
16writing. Within ten business days of the date of the written
17cancellation, the residential contractor shall tender to the
18named insured, the land owner, or the possessor of the real
19estate, any payments, partial payments, or deposits that have
20been made by such person.
216. Any written contract, repair estimate, or work order
22prepared by a residential contractor to provide goods or
23services to be paid from the proceeds of a property and
24casualty insurance policy shall include the following notice
25in capitalized fourteen point type, which shall be signed by
26the named insured, and sent to the named insured’s insurance
27company prior to payment of proceeds under the applicable
28insurance policy:
29IT IS A VIOLATION OF THE INSURANCE LAWS OF IOWA TO REBATE
30ANY PORTION OF AN INSURANCE DEDUCTIBLE AS AN INDUCEMENT TO THE
31INSURED TO ACCEPT A RESIDENTIAL CONTRACTOR’S PROPOSAL TO REPAIR
32DAMAGED PROPERTY. REBATE OF A DEDUCTIBLE INCLUDES GRANTING
33ANY ALLOWANCE OR OFFERING ANY DISCOUNT AGAINST THE FEES TO
34BE CHARGED FOR WORK TO BE PERFORMED OR PAYING THE INSURED
35POLICYHOLDER THE DEDUCTIBLE AMOUNT SET FORTH IN THE INSURANCE
-4-1POLICY. THE INSURED POLICYHOLDER IS PERSONALLY RESPONSIBLE FOR
2PAYMENT OF THE DEDUCTIBLE.
35. 7. A contract entered into with a residential contractor
4is void if the residential contractor violates subsection 2, 3,
5or 4 any provision of this section.
66. 8. a. A residential contractor violating this section
7is subject to the penalties and remedies prescribed by this
8chapter.
9b. A violation of subsection 2 3 or 3 4 by a residential
10contractor is an unlawful practice pursuant to section 714.16.
11EXPLANATION
12The inclusion of this explanation does not constitute agreement with
13the explanation’s substance by the members of the general assembly.
14This bill relates to residential contractors and repair
15or services performed on residential real estate covered by
16property and casualty insurance.
17Current law requires a residential contractor contracting to
18provide goods or services on residential real estate to provide
19notice to the person with whom they are contracting that such
20person will be responsible for the cost of all goods and
21services provided, regardless if the person receives payment
22from any property and casualty insurance. The notice must also
23provide that the contract is void if the contractor promises
24to rebate any portion of the person’s insurance deductible, or
25negotiates, or offers to negotiate, with the person’s insurance
26company.
27The bill requires that the notification prohibiting a
28contractor’s rebate of a deductible be included in any written
29contract, repair estimate, or work order, and be signed by the
30named insured. A copy of such notification must be sent to the
31named insured’s insurer prior to the payment of any proceeds
32under the applicable insurance policy.
33The bill requires a notice regarding responsibility for the
34cost of all goods and services be included in any post-loss
35assignment of rights and benefits by a named insured to a
-5-1residential contractor under a property and casualty insurance
2policy that covers residential real estate. The assignment
3must also include an itemized description of the work to be
4performed, and of the cost of the materials, labor, and fees
5for the goods or services to be provided.
6A copy of the assignment must be provided to the insurer
7within five business days after execution. The assignment
8cannot prevent the insurer from communicating with the
9named insured or mortgagee listed on the declarations page
10of the policy that is the subject of the assignment. The
11named insured can cancel the assignment for any reason
12within five business days from the date of execution of the
13assignment. Within 10 business days of the date of the written
14cancellation, the residential contractor must return to the
15named insured, the owner, or the possessor of the residential
16real estate, any payments or deposits that have been made by
17such person.
18A residential contractor who violates a provision of the
19bill is subject to penalties and remedies pursuant to Code
20chapter 103A. In addition, a contractor who advertises a
21rebate or promises to rebate a named insured’s deductible to
22induce a sale, or represents or negotiates with an insurer
23on behalf of a named insured, commits a consumer fraud and
24is subject to criminal and civil penalties pursuant to Code
25section 714.16.
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