Amendments to the Indiana Home Improvement Act (Indiana Code §24-5-11-1 et. seq.) were recently enacted and are effective July 1, 2012. The Act’s new requirements focus on exterior improvements to a residential structure that will, in whole or in part, be paid from insurance proceeds. Remodelers will now be required to give certain notice and cancellation provisions as part of their remodeling contracts, which permit a homeowner to cancel a home improvement contract within three business days after the homeowner receives written notification from their insurance company that any part of the claim is not a covered loss under their insurance policy.
One purpose of the Act’s amendments is to give homeowners the opportunity to investigate coverage for the proposed improvements with their insurance company and terminate contracts for which they have inadequate coverage. The Act does entitle a contractor to payment for temporary and emergency services necessary to prevent damage to the property, even if the homeowner cancels the contract, so long as the homeowner acknowledges, in writing, the necessity of the services before they are performed.
Home improvement contractors should also be aware that the Act now specifically prohibits advertising, paying, rebating or offering to pay or rebate any portion of the homeowner’s insurance deductible in an effort to entice the homeowner to enter into an agreement.
Remodelers must amend their home improvement contracts to comply with the requirements of the Act, as well as to address evidence of coverage, commencement, and other matters.
If you have questions on construction matters, call one of our experienced construction law attorneys: Shannon Frank, Kent Brasseale, Mike DiRienzo, Mike Schopmeyer, Jeff Ahlers, Steve Hoar or Brian Williams. Our attorneys take pride in guiding our clients with regard to construction and remodeling contracts, construction litigation, mechanics liens, and other commercial and residential construction industry matters.