SB38 | The Consumer Protection | Roofing Bill

Applying to residential properties for roofing work over $1000, will be signed into law by Governor Hickenlooper and become effective on Wednesday 6/6. There is no ʻgrace periodʼ for compliance. The recommendation is to comply with the spirit and intent of the law immediately and get contracts printed or altered with newly required contract language as soon as is practical and possible.A A A Colorado logo

Therefore, effective 6/6: Allow for the stated rescission periods; do not waive, pay or rebate any deductibles; if your

company requires/accepts deposits from property owners, set up a trust account to hold funds as required by law. Immediately and always include in the required written & signed contract between the property owner and roofing contractor the following information:

  • scope of roofing services & materials to be provided
  • cost for same based on damages known at the time the contract is entered into
  • approximate dates of service
  • roofing contractorʼs contact information

Universal Citation: CO Rev Stat § 6-22-105 (2017)

(1) A roofing contractor that performs roofing work, the payment for which will be made from the proceeds of a property and casualty insurance policy issued pursuant to part 1 of article 4 of title 10, C.R.S., shall not advertise or promise to pay, waive, or rebate all or part of any insurance deductible applicable to the claim for payment for roofing work on the covered residential property.

(2) If a roofing contractor violates subsection (1) of this section:

(a) The insurer to whom the property owner submitted the claim for payment for the roofing work is not obligated to consider the estimate of costs for the roofing work prepared by the roofing contractor; and

(b) The property owner whose residential property is insured under the property and casualty insurance policy or the insurer that issued the policy may bring an action against the roofing contractor in a court of competent jurisdiction to recover damages sustained by the property owner or insurer as a consequence of the violation.

(3) A roofing contractor soliciting roofing services in this state shall not claim to be or act as a public insurance adjuster adjusting claims for losses or damages. Nothing in this article prevents a public insurance adjuster licensed pursuant to section 10-2-417, C.R.S., from acting or holding himself or herself out as a public insurance adjuster. Nothing in this subsection (3) precludes a roofing contractor from discussing, on behalf of the property owner, the scope of repairs with a property and casualty insurer when the roofing contractor has a valid contract with the property owner of the residential property on which the roofing contractor has contracted to perform roofing work.

The statute also requires that the written contract must include provisions

(1) stating that the roofing contractor shall hold in trust any payment from the property owner until the roofing contractor has delivered materials or has performed a majority of the work;

(2) identifying the contractor’s surety and liability coverage insurer if applicable;

(3) stating the contractor’s cancellation and refund policy, including a 72 hour right of rescission;

(4) stating that the contract may be rescinded within 72 hours after the property owner receives written notice that its insurance claim has been denied; and (5) stating that that contractor cannot pay or waive an insurance deductible. In an effort to facilitate compliance with the new statute, the CRA consulted with attorney Stephen Phillips, of Hendrick, Phillips, Salzman & Flatt who has offered sample language which closely monitors the language in the statute for these provisions. Obviously, CRA members should feel free to use whatever language they deem suitable.


  1. [Name of CRA Member] shall hold in trust any payment received from you until [Name of CRA Member] has delivered roofing materials at the site or has performed a majority of the roofing work on your property.

*The above provision is to be on the face of the contract in bold face type!

  1. [Name of CRA Member] carries workerʼs compensation, automobile and commercial general

liability (bodily injury and property damage) insurance. A Certificate of Insurance identifying our insurance carrier and the types and amounts of coverage and our insurance contact information is attached or will be provided to Customer and is incorporated herein by reference and should be considered as part of this contract. OR [Name of CRA Memberʼs] liability coverage insurer is [Name of CRAʼs liability insurance carrier (s)] and can be contacted through [Name and contact information for CRAʼs insurance agent(s) or address for CRAʼs insurance carrier(s). ] *ʼBecause the statute refers only to “liability coverage insurer,” it is unknown which liability insurance carriers are to be disclosed. I would think that the intent of the statute is to identify the roofing contractorʼs general liability policy, but to be safe, a roofing contractor might provide the name and contact for general liability, auto liability and workerʼs compensation/employer liability policies. If the same agent handles all these policies, only one contact would need to be included in the contractʼ.

  1. You have the right to rescind this contract and obtain a full refund of any deposit within 72 hours after entering the contract. If you plan to use the proceeds of a property and casualty insurance policy to pay for the roofing work, you may rescind this contract within 72 hours after you receive written notice from the property and casualty insurer that your claim has been denied in whole or in part. However, [Name of CRA Member] is entitled to retain payments or deposits to compensate [Name of CRA Member] for roofing work actually performed in a workmanlike manner consistent with standard roofing industry practices. [Name of CRA

Member] cannot pay, waive, rebate, or promise to pay, waive or rebate all or part of any insurance deductible applicable to the insurance claim for payment for roofing work on your property.

  1. Property Owner is _____ / is not ______ intending to make payment from the proceeds of a property and casualty insurance policy. Other items of advisement: CRA Members should consider not beginning any work and/or ordering any materials until after

the 72 hour right of rescission period(s) have expired. Include in contract language a statement regarding entitlement to compensation for custom or non-returnable materials that may have been ordered prior to any contract rescission.



1) Existing Colorado statute related to property insurance fraud (CRS states that paying, waiving or rebating a property ownerʼs insurance deductible is a Class 2 Misdemeanor. This bill goes farther to say that if it is proven a deductible was paid/waived/rebated, the insurance company does not have to consider the estimate from any contractor violating the provision, and the property owner or the insurer may sue the contractor for any damages related to same. Damages may include just the deductible amount, or the cost difference between appropriate roofing materials and any lesser quality materials that a contractor may have used in order to offset the cost of the deductible, etc. Recoverable damages would be case specific.

2) A contract lacking SB38ʻs specific written provisions may be found to be unenforceable by either party.

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