Postloss assignment of rights or benefits under property insurance policies to residential contractors and providing a penalty, the official text

2025 - 2026 LEGISLATURE
LRB-3605/1
JPC:cjs&wlj

2025 SENATE BILL 531
October 9, 2025 - Introduced by Senators Felzkowski, Nass, Dassler-Alfheim and Spreitzer, cosponsored by Representatives Callahan, Murphy, Piwowarczyk and Dittrich. Referred to Committee on Insurance, Housing, Rural Issues and Forestry.

An Act to create 632.11 of the statutes; relating to: postloss assignment of rights or benefits under property insurance policies to residential contractors and providing a penalty.

Analysis by the Legislative Reference Bureau
This bill establishes certain requirements and restrictions on the assignment to residential contractors of postloss rights and benefits under property insurance policies. Under the bill, “residential contractor” is defined to mean a person who is in the business of contracting to repair or replace residential roof systems or to perform any other repair, replacement, or reconstruction work to address damage to residential real estate caused by a catastrophe or a person who offers to contract with an owner or possessor of residential real estate to carry out such work. “Residential contractor” includes a person who is in the business of contracting to remove trees, repair trees, or provide other related services. Under the bill, “catastrophe” means a natural occurrence that damages or destroys residential real estate and includes fires, floods, hail storms, tornadoes, windstorms, and any other naturally occurring weather event for which the governor declares a state of emergency.
First, the bill prohibits residential contractors from advertising or promising to rebate any insurance deductible or any portion of an insurance deductible as an inducement to the sale of goods or services. The bill further provides that no residential contractor may represent or negotiate on behalf of, or offer or advertise to represent or negotiate on behalf of, an owner or possessor of residential real estate for any insurance claim in connection with the repair or replacement of roof systems or the performance of any other exterior repair, exterior replacement, or exterior reconstruction work on the residential real estate. Any residential contractor contracting to provide goods or services to repair damage resulting from a catastrophe must provide certain written disclosures either prior to or contemporaneously with entering into the contract.
Second, the bill provides that any postloss assignment of rights or benefits under a property insurance policy insuring residential real estate by a named insured to a residential contractor is subject to certain restrictions and must meet certain criteria. For example, the bill provides that any such postloss assignment must include an itemized description of the work to be performed, an itemized description of the materials, labor, and any fees for the work to be performed, and a total amount to be paid for the work to be performed. The bill also provides that the named insured for any such postloss assignment has the right to cancel the assignment for any reason within five business days. The bill requires any such assignment to include certain written disclosures of this right. Further, the bill prohibits a residential contractor from accepting an assignment of rights or benefits under a property insurance policy insuring residential real estate unless the contractor may obtain a building permit for the work to be performed under current law.
The bill provides that a contract entered into with a residential contractor is void if the residential contractor violates any provision of the bill. If a residential contractor violates any provision of the bill, the commissioner of insurance may, after notice and hearing conducted pursuant to current law, impose a forfeiture not to exceed $10,000 per violation. Additionally, if the commissioner of insurance has reason to believe that a residential contractor is violating any provision of the bill, the commissioner, the attorney general, or the district attorney of the proper county may investigate and may, in addition to any other remedies, bring an action in the name and on behalf of this state to enjoin the residential contractor from the violation.
Finally, the bill creates and restricts certain legal rights that result from the assignment of postloss rights or benefits under a property insurance policy insuring residential real estate by a named insured. If a residential contractor accepts a postloss assignment, the residential contractor must pursue payment only from the property insurance company until all legal rights against the property insurance company are exhausted. If a named insured grants a postloss assignment of rights or benefits under a property insurance policy to a residential contractor, the property insurance company must automatically, by operation of law and without further action by any party, receive an assignment of the named insured’s rights against the residential contractor under the terms of the contract with the residential contractor and under state law. A named insured who grants a postloss assignment of rights or benefits under a property insurance policy to a residential contractor may not pursue any noncontractual claims against the property insurance company. A residential contractor who accepts a postloss assignment of rights or benefits under a property insurance policy insuring residential real estate may pursue a noncontractual claim against the property insurance company only if the conduct that the claim is based on occurred before the assignment and is related to the loss for which the work is being performed.
For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

Section 1. 632.11 of the statutes is created to read:
632.11 Residential contractors and postloss assignment of rights or benefits.
(1) In this section:
(a) “Catastrophe” means a natural occurrence that damages or destroys residential real estate. “Catastrophe” includes any of the following:
1. Earthquake.
2. Fire.
3. Flood.
4. Hail storm.
5. Tornado.
6. Windstorm.
7. Any naturally occurring weather event for which the governor declares a state of emergency under s. 323.10.
(am) “Postloss assignment” means a written transfer of any claim, right, or benefit under a property insurance policy after a covered loss has occurred, including a right to payment for repairs or services.
(b) “Residential contractor” means a person who is in the business of
contracting to repair or replace residential roof systems or to perform any other repair, replacement, or reconstruction work to address damage to residential real estate caused by a catastrophe or a person who offers to contract with an owner or possessor of residential real estate to carry out such work. “Residential contractor” includes a person who is in the business of contracting to remove trees, repair trees, or provide other related services to address damage caused by a catastrophe.
(c) “Residential real estate” means a new or existing building, including a detached garage, constructed for habitation by one to 4 families.
(d) “Roof system” includes roof coverings, roof sheathing, roof weatherproofing, and roof insulation.
(2) (a) No residential contractor may advertise or promise to rebate any insurance deductible or any portion thereof as an inducement to the sale of goods or services. A promise to rebate any insurance deductible includes granting any allowance, offering any discount, waiver, or reduction against the fees to be charged for goods or services, or providing or paying any person directly or indirectly associated with the residential real estate any form of compensation, except for items of nominal value. This paragraph shall not be construed to prohibit a residential contractor from displaying a sign or other type of advertisement on a person’s premises provided that the person consents to the display and the person receives no compensation from the residential contractor for the placement of the sign or other type of advertisement.
(b) No residential contractor may represent or negotiate on behalf of, or offer or advertise to represent or negotiate on behalf of, an owner or possessor of residential real estate for any insurance claim in connection with the repair or
replacement of roof systems, or the performance of any other exterior repair, exterior replacement, or exterior reconstruction work on the residential real estate.
(c) 1. A residential contractor contracting to provide goods or services to repair damage resulting from a catastrophe shall provide the person with whom the residential contractor is contracting a fully completed duplicate notice in at least 10 point bold type that contains the following statement:
NOTICE OF CONTRACT OBLIGATIONS AND RIGHTS
You may be responsible for payment to (insert name of residential contractor) for the cost of all goods and services provided whether or not you receive payment from any property insurance policy with respect to the damage. Pursuant to Wisconsin law your contract with (insert name of residential contractor) to provide goods and services to repair damage resulting from a naturally occurring catastrophe is void and you have no responsibility for payment under the contract if (insert name or residential contractor) either advertises or promises to rebate all or any portion of your insurance deductible, or represents or offers to represent you, or negotiates or offers to negotiate on your behalf, in any interaction with your property insurance company regarding any insurance claim relating to the damage you have contracted to have repaired. Your signature below acknowledges your understanding of these legal obligations and rights.
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Date
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Signature
2. The notice under subd. 1. shall be executed by the person with whom the
residential contractor is contracting prior to or contemporaneously with entering into a contract to provide goods or services to repair damage resulting from a catastrophe.
(3) A postloss assignment of rights or benefits under a property insurance policy insuring residential real estate by a named insured to a residential contractor is subject to all of the following:
(a) The assignment may authorize a residential contractor only to be named as a copayee for the payment of benefits under the property insurance policy for work performed by the contractor.
(b) The assignment shall include all of the following:
1. An itemized description of the work to be performed.
2. An itemized description of the materials, labor, and any fees for the work to be performed.
3. A total amount to be paid for the work to be performed.
(c) The assignment shall include a statement that the residential contractor has made no assurances that the claimed loss will be fully covered under the property insurance policy and shall include the following notice in capitalized 14- point type:
YOU ARE AGREEING TO GIVE UP CERTAIN RIGHTS YOU HAVE UNDER YOUR PROPERTY INSURANCE POLICY. PLEASE READ AND UNDERSTAND THIS DOCUMENT BEFORE SIGNING.
THE ITEMIZED DESCRIPTION AND PRICING OF THE WORK TO BE DONE SHOWN IN THIS ASSIGNMENT FORM HAS NOT BEEN AGREED TO BY THE INSURER. THE INSURER HAS THE RIGHT TO PAY FOR LOSS
SUBJECT TO THEIR ASSESSMENT AND ACCORDING TO THE TERMS AND CONDITIONS FOR THE INSURANCE POLICY ONLY FOR THE COST TO REPAIR OR REPLACE DAMAGED PROPERTY CAUSED BY A COVERED PERIL.
(d) The assignment shall include the following notice in capitalized 14-point type located in the immediate proximity of the space reserved in the assignment for the signature of the named insured:
YOU MAY CANCEL THIS ASSIGNMENT WITHOUT PENALTY WITHIN FIVE (5) BUSINESS DAYS FROM THE DATE THAT THE ASSIGNMENT IS EXECUTED OR THE DATE ON WHICH YOU RECEIVE A COPY OF THE EXECUTED ASSIGNMENT, WHICHEVER IS LATER.
YOU MUST CANCEL THE ASSIGNMENT IN WRITING AND THE CANCELLATION MUST BE DELIVERED TO (name and address of residential contractor as provided by the residential contractor). IF MAILED, THE CANCELLATION MUST BE POSTMARKED BEFORE THE FIVE (5) BUSINESS DAY DEADLINE. IF YOU CANCEL THIS ASSIGNMENT, THE RESIDENTIAL CONTRACTOR HAS UP TO TEN (10) BUSINESS DAYS TO RETURN ANY PAYMENTS OR DEPOSITS MADE.
(e) The assignment shall not be construed to impair the interest of a mortgagee listed on the declarations page of the property insurance policy that is the subject of the assignment.
(f) The assignment shall not be construed to prevent or inhibit an insurer from communicating with the named insured or mortgagee listed on the
declarations page of the property insurance policy that is the subject of the assignment.
(g) The residential contractor shall provide a copy of the executed assignment to the insurer of the residential real estate within 5 business days following the date that the assignment is executed.
(h) The named insured has the right to cancel the assignment for any reason within 5 business days following the date that the assignment is executed or the date on which the named insured receives a copy of the executed assignment, whichever is later. The cancellation must be made in writing. Within 10 business days following the date that the named insured cancels the assignment under this paragraph, the residential contractor shall tender to the named insured, the land owner, or the possessor of the real estate any payments, partial payments, or deposits that have been made by the named insured, land owner, or possessor.