What Is a Contingency Agreement?
A contingency agreement means your roofing contractor gets paid only if your insurance claim is approved — typically taking a percentage of the claim amount as their fee. While this sounds like a win-win, contingency agreements create dangerous conflicts of interest that can leave you with a substandard roof and legal exposure.
The Three Problems with Contingency Agreements
- Conflict of Interest: When your contractor's payment depends on the claim being approved, they have financial incentive to inflate the damage scope — potentially committing insurance fraud in your name. If the insurance company investigates and finds fraud, you're the policyholder — you bear the legal responsibility.
- Quality Incentives Are Misaligned: A contingency contractor wants to maximize claim payout while minimizing out-of-pocket work. This can lead to partial repairs instead of full replacement, lower-grade materials than specified, and rushed workmanship.
- No Incentive to Advocate: If your claim is partially approved (say 70% of expected), a contingency contractor has already been paid their percentage. They have no financial reason to appeal the denial of remaining items. A forensic roofing authority like Proof Construction gets paid for accuracy — not claim approval.