Contractors Cannot Offer to Pay Your Deductible

In 2010, the Minnesota Legislature passed a law prohibiting residential building contractors and remodelers from offering to pay all or part of a homeowner’s insurance deductible or offer anything of value to convince a homeowner to enter into a contract (Minn. Stat. § 325E.66). The law has since changed. The Construction Codes and Licensing Division (CCLD) has begun to enforce action against contractors for violations.

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This law states that a contractor cannot offer to pay part or all of a homeowner’s deductible and restricts a contractor from offering or providing anything of value in exchange for their services. For example, contractors are prohibited from offering rebates, credits, free meals, material upgrades free of charge, or anything of value to entice a homeowner to sign a contract funded by insurance funds. It is also essential to note that any advertisement or marketing materials offering benefits in a retail transaction must include a clear disclaimer that the offer does not apply to insurance-funded projects.

Another recent change to the law requires contractors to provide a written summary of these constraints to a potential customer when the contractor provides their initial estimate; insurance companies and adjusters are also required to provide this information to the homeowner. The written summaries help clarify it is illegal for contractors to offer incentives prohibited by law.

If you have any questions about this law, contact CCLD Enforcement Services at 651-284-5069 or