Why Contingency Agreements Are a Problem in Florida Roofing—and Why Work Authorizations with Financing Are the Better Option
By Mr. Roofr | May 27, 2025
In Florida, where hurricanes and tropical storms are a way of life, roofing repairs are a constant need. Homeowners and roofing contractors often face the challenge of navigating insurance claims and repair costs after storm damage. While contingency agreements—also known as Assignment of Benefits (AOBs)—were once a common tool in the roofing industry, they’ve become a problematic choice in Florida’s unique legal and insurance environment. Instead, work authorizations paired with financing offer a smarter, more reliable solution for both homeowners with storm-damaged roofs and roofing contractors. Here’s why.
The Pitfalls of Contingency Agreements in Florida Roofing
A contingency agreement allows a homeowner to assign their insurance claim benefits to a roofing contractor, who then handles the claim process and gets paid directly from the insurance payout. While this might sound convenient, it’s fraught with issues in Florida:
1. Frequent Claim Denials and Underpayments
Florida’s insurance market is one of the toughest in the country. After years of fraud and skyrocketing claims, particularly post-hurricane, insurers have tightened their processes. Claims for storm-damaged roofs are often denied due to policy exclusions (like wear-and-tear clauses) or underpaid due to disputes over damage scope. When a contractor relies on a contingency agreement, they’re betting on the insurance company’s approval. If the claim is denied or the payout is insufficient, the contractor may be left unpaid, eating the cost of labor and materials.
2. Legal Restrictions on AOBs
In 2019, Florida passed House Bill 7065 to address widespread AOB abuse in the roofing and restoration industries. This law imposes strict rules, including mandatory disclosures, a 14-day cancellation period for homeowners, and limits on what contractors can recover through AOBs. Non-compliance can render an agreement void, leaving contractors with no legal recourse for payment. This regulatory minefield makes contingency agreements risky and cumbersome.
3. Risks for Homeowners
Homeowners signing contingency agreements often face unintended consequences. If an insurance claim is denied or the payout falls short, contractors may pursue the homeowner for payment, leading to disputes or even liens on the property. Additionally, frequent AOB claims can flag a homeowner’s policy for non-renewal or premium increases, adding financial strain after a storm.
4. Cash Flow Nightmares for Contractors
Contingency agreements tie a contractor’s payment to the slow and unpredictable insurance claim process, which can take months—or even years—in Florida. This creates cash flow problems, making it hard to pay crews, buy materials, or take on new jobs. In a state where storm seasons drive intense demand, waiting on insurance payouts can cripple a roofing business.
Why Work Authorizations with Financing Are the Better Choice
A work authorization is a direct contract between the homeowner and contractor, specifying the scope of work, costs, and payment terms. When paired with financing options, it’s a game-changer for both parties. Here’s why this approach beats contingency agreements:
1. Guaranteed Payment for Contractors
With a work authorization, contractors agree on a fixed price for the roofing work upfront, independent of insurance outcomes. This ensures they get paid for their services, regardless of whether the homeowner’s insurance claim is approved. No more chasing insurance companies or risking unpaid invoices.
2. Clarity and Control for Homeowners
Work authorizations provide homeowners with a clear understanding of repair costs and timelines. They can file insurance claims separately to recover costs, but the roofing work isn’t delayed by claim disputes. This transparency reduces stress and builds trust, especially for homeowners recovering from storm damage.
3. Financing Eases Financial Burdens
Storm damage often catches homeowners off guard, and not everyone has the cash to cover repairs upfront. Financing options, such as low-interest loans or payment plans offered through the contractor or third-party lenders, make repairs affordable. Homeowners can start repairs immediately while spreading payments over time, and contractors get paid promptly without relying on insurance.
4. Legal Simplicity and Compliance
Unlike AOBs, work authorizations aren’t subject to Florida’s strict AOB regulations. They’re straightforward contracts that are easier to draft and enforce, reducing legal risks for contractors. Homeowners also benefit from clear terms that minimize the chance of disputes or surprise costs.
5. Faster Repairs, Happier Clients
By decoupling repairs from insurance claims, work authorizations allow contractors to start work sooner. Pairing this with financing means homeowners don’t have to wait for claim approvals to fix their storm-damaged roofs. Faster repairs prevent further damage (like leaks or mold) and boost customer satisfaction, leading to referrals and repeat business.
A Real-World Example
Consider a homeowner in Tampa whose roof is damaged by a hurricane. They sign a contingency agreement with a roofer, expecting the insurance company to cover the $20,000 repair. After months of back-and-forth, the insurer denies the claim, citing pre-existing damage. The contractor, who has already replaced the roof, is unpaid and files a lien against the homeowner’s property. Both parties end up in a costly dispute.
Now, imagine the same scenario with a work authorization and financing. The contractor provides a $20,000 estimate, and the homeowner agrees to a financing plan with monthly payments. The roof is repaired quickly, preventing further damage. The homeowner files an insurance claim separately, and even if it’s denied, the contractor is paid, and the homeowner has manageable payments. Everyone wins.
Tips for Contractors and Homeowners
**For Contractors**:
– Offer financing through trusted partners to make repairs accessible for homeowners.
– Provide detailed work authorizations that outline scope, costs, and timelines to build trust.
– Educate homeowners on the risks of contingency agreements and the benefits of financing.
– Keep records of all agreements and communications to protect against disputes.
**For Homeowners**:
– Ask for a clear work authorization before signing anything to understand your costs upfront.
– Explore financing options to avoid delaying critical repairs.
– File insurance claims independently and consult a public adjuster if needed to maximize your payout.
– Work with reputable contractors who prioritize transparency and compliance with Florida laws.
A Win-Win for Florida’s Roofing Industry
Contingency agreements are a losing proposition in Florida’s roofing market, creating risks and uncertainties for both homeowners and contractors. Work authorizations paired with financing offer a better path forward: contractors get paid reliably, homeowners get affordable repairs without delays, and storm-damaged roofs are fixed faster. In a state battered by storms, this approach is a win-win that keeps roofs intact and businesses thriving.
If you have suffered storm damage to your home give us a call, we would be happy to provide a Free assessment of your damage and a no obligation consultation on what your options are! 386-281-8831
*Mr. Roofr is a Florida roofing expert passionate about helping contractors and homeowners navigate storm repairs with confidence. Follow for more insights on thriving in the Sunshine State’s roofing industry.*
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*Note*: This post reflects Florida’s roofing and insurance landscape as of May 27, 2025, based on industry trends and legal frameworks like House Bill 7065. For specific legal or financial advice, consult a licensed attorney or financial advisor. This is not legal advice.