26.1-39.2-02. Contract to be paid from proceeds of property and casualty insurance policy - Right to cancel - Duties

26.1-39.2-02. Contract to be paid from proceeds of property and casualty insurance

policy - Right to cancel - Duties.

1. A person that enters a written contract with a residential contractor to provide goods or

services to be paid from the proceeds of a property and casualty insurance policy may

cancel the contract before midnight on the later of the fifth business day after the

person has:

a. Entered the written contract; or

b. Received written notice from the person's insurer that all or part of the claim or

contract is not a covered loss under the insurance policy.

2. The written contract must include a statement that the insured homeowner has the

right to cancel the contract in accordance with subsection 1.

3. The person seeking to cancel the contract shall evidence the cancellation by giving the

residential contractor a signed and dated copy of written notice of the cancellation.

a. The notice of cancellation may be delivered or mailed to the address of the

residential contractor's place of business as stated in the contract.

b. The notice of cancellation must include a copy of the written notice from the

person's insurer, if applicable, to the effect that all or part of the claim or contract

is not a covered loss under the insurance policy.

c. Notice of cancellation given by mail is effective upon deposit in the United States

mail, postage prepaid, if properly addressed to the residential contractor.

d. Notice of cancellation is not required to be in a particular form and is sufficient if

the notice indicates the intent of the insured not to be bound by the contract.

4. Within ten days after a contract to provide goods or services to be paid from the

proceeds of a property and casualty insurance policy has been canceled by

notification pursuant to this section, the residential contractor shall tender to the

person canceling the contract any payments, partial payments, or deposits made by

the person and any note or other evidence of indebtedness, except if the residential

contractor has provided goods or services agreed to by the person in writing to be

necessary to prevent damage to the premises, the residential contractor is entitled to

be paid the reasonable value of those goods or services. A contract provision to

provide goods or services to be paid from the proceeds of a property and casualty

insurance policy requiring the payment of a fee that is not for those goods or services

is not enforceable against a person that has canceled a contract pursuant to this

section.