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Echo Press Editorial: Beware of storm-damage rebate offers

If your home or property was damaged in last week's storm, you'll want to read this.

The Better Business Bureau of Minnesota and North Dakota is alerting consumers about a Minnesota law enacted in 2010 that prohibits contractors from advertising or promising to pay or rebate all or part of any applicable insurance deductibles.

"This law protects consumers and insurance companies from contractors who might inflate repair costs in order to pay the homeowner's deductible," said Charlie Durenberger, manager of licensing and enforcement services for the Minnesota Department of Labor and Industry.

It may sound like a tempting idea for owners of storm-damaged homes to take advantage of an insurance company's "deep pockets" to, in effect, cover the deductible, but there are consequences.

The business bureau points out that it would ultimately lead to rising costs of homeowners' insurance for all consumers.

Contractors also face legal consequences. Under the 2010 law, the labor department has broader powers to enforce the provision and contractors who are found to have offered to pay or rebate a homeowner's insurance deductible can face a number of penalties, including suspension or revocation of their contractor's license and a fine of up to $10,000.

The bottom line: Before you hire a contractor, be sure to ask for their license number and then contact the Department of Labor and Industry at (651) 284-5069 or 1-800-342-5354 to verify that the contractor is currently licensed, and also to find out if they have a disciplinary history.

"BBB is always monitoring the marketplace for questionable business practices," said Susan Adams Loyd, president and CEO of the bureau in Minnesota and North Dakota. "We feel it's of vital importance to help educate the public on matters such as this and we encourage consumers to make principled decisions based on facts."

Homeowners need to know they are responsible for paying the deductible on their homeowners insurance. If a contractor claims otherwise, consumers should report the incident to the Department of Labor and Industry at (651) 284-5069 and the Better Business Bureau at or 1-800-646-6222.

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Echo Press editorials represent the opinion of the Echo Press Editorial Board, which includes Jeff Beach, Editor; Jody Hanson, Publisher; and Al Edenloff, News/Opinion Editor.