Work and services for insured persons, contractors not to induce sales

407.725. Work and services for insured persons, contractors not to induce sales — cancellation of contracts, requirements, contractor duties — violations, penalty. — 1. As used in this section, the following terms mean:

(1) "Contractor", a person or entity in the business of contracting or offering to contract with an owner or possessor of residential or commercial real estate to repair or replace roof systems or perform any other exterior repair, replacement, construction, or reconstruction work on any residential or commercial structure situated upon such real estate;

(2) "Roof system", includes roof coverings, roof sheathing, roof weatherproofing, and insulation.

2. A contractor shall not advertise or promise to pay or rebate all or any portion of any insurance deductible as an inducement to the sale of goods or services. As used in this section, a promise to pay or rebate includes granting any allowance or offering any discount against the fees to be charged or paying the insured or any person directly or indirectly associated with the property any form of compensation, gift, prize, bonus, coupon, credit, referral fee, or other item of monetary value for any reason.

3. A person who has entered into a written contract with a contractor to provide goods or services to be paid under a property and casualty insurance policy may cancel the contract prior to midnight on the fifth business day after the insured party has received written notice from the insurer that all or any part of the claim or contract is not a covered loss under the insurance policy. Cancellation shall be evidenced by the insured party giving written notice of cancellation to the contractor at the address stated in the contract. Notice of cancellation, if given by mail, shall be effective upon deposit into the United States mail, postage prepaid and properly addressed to the contractor. Notice of cancellation need not take a particular form and shall be sufficient if it indicates, by any form of written expression, the intention of the insured party not to be bound by the contract.

4. Before entering a contract referred to in subsection 3 of this section, the contractor shall:

(1) Furnish the insured party a statement in boldface type of a minimum size of ten points, in substantially the following form:

(2) Furnish each insured a fully completed form in duplicate, captioned "NOTICE OF CANCELLATION", which shall be attached to the contract but easily detachable, and which shall contain, in boldface type of a minimum size of ten points, the following statement:

5. Within ten days after a contract referred to in subsection 3 of this section has been cancelled, the contractor shall tender to the owner or possessor of real estate any payments, partial payments, or deposits made and any note or other evidence of indebtedness. If, however, the contractor has performed any emergency services, acknowledged by the insured in writing to be necessary to prevent damage to the premises, the contractor shall be entitled to the reasonable value of such services. Any provision in a contract referred to in subsection 3 of this section that requires the payment of any fee for anything except emergency services shall not be enforceable against the owner or possessor of real estate who has cancelled a contract pursuant to this section.

6. A contractor shall not represent or negotiate, or offer or advertise to represent or negotiate, on behalf of an owner or possessor of real estate on any insurance claim in connection with the repair or replacement of roof systems, or the performance of any other exterior repair, replacement, construction, or reconstruction work.

7. Any violation of this section by a contractor shall be considered an unfair practice pursuant to the Missouri merchandising practices act as codified in this chapter.