SB201: SB201 Consumer Transactions; increased consumer protection for homeowners entering into contracts with contractors following natural disasters; provide

After storms, tornadoes, or other disasters, Georgia homeowners often rush to hire contractors to repair damage, sometimes assigning their insurance payout directly to the contractor so repairs can start faster. This bill responds to concerns that some contractors take those assigned proceeds but then delay work or do it poorly. The bill amends Georgia's consumer protection law (O.C.G.A. § 10-1-393) to make it an unfair or deceptive practice for a contractor working under a contract signed within one year of a disaster to accept assigned insurance proceeds, fail to substantially start work within a year, do substandard work, or ignore state building codes. It also requires contractors to give homeowners a right to cancel the contract within five business days of learning their insurance claim is denied, along with specific notice language. Separately, it amends Georgia insurance law (O.C.G.A. § 33-6-5) to stop insurers from selling homeowner's policies that allow proceeds to be assigned to a contractor within a year of a disaster. The insurance provision takes effect January 1, 2026, for policies issued or renewed after that date; the rest of the bill takes effect July 1, 2025.

• Makes it an unfair or deceptive practice for a contractor to accept a homeowner's assigned insurance proceeds under a contract signed within one year of a natural disaster.
• Requires contractors in these post-disaster contracts to let homeowners cancel within five business days after being told their insurance claim isn't covered, and to provide specific written cancellation notices.
• Makes it an unfair practice for a contractor to fail to substantially start work within one year of signing the contract or to complete work in a substandard manner or against code.
• Prohibits insurers from selling homeowner's insurance policies that allow assignment of proceeds to a contractor within one year of a natural disaster.
• Allows contractors who perform emergency work acknowledged in writing by the homeowner to still collect reasonable payment for that emergency work even if the rest of the contract is canceled.
• Defines 'natural disaster' as a flood, tornado, hurricane, earthquake, or other event for which the Governor declares a state of emergency.

Homeowners whose property is damaged in a disaster and who sign repair contracts, contractors who perform post-disaster repair or mitigation work, and insurance companies that write homeowner's insurance policies in Georgia.

Homeowners who rush to hire repair contractors after a disaster would gain a clear right to cancel bad deals and would no longer be able to hand over their insurance payout to a contractor for a full year, which is meant to reduce the risk of contractors taking money without finishing repairs.

• Section 1 lists legislative findings that homeowners often sign disaster repair contracts quickly and may not realize assigning insurance proceeds can leave them without recourse.
• Section 2 adds a new paragraph (36) to O.C.G.A. § 10-1-393 defining specific contractor actions in post-disaster contracts as unfair or deceptive practices, including accepting assigned proceeds and failing to start work within a year.
• Section 2 requires contractors to furnish a boldface cancellation notice of at least ten-point type and a detachable 'NOTICE OF CANCELLATION' form with the contract.
• Section 2 allows contractors to still collect payment for emergency work the homeowner acknowledged in writing as necessary to prevent immediate damage, even after cancellation.
• Section 3 amends O.C.G.A. § 33-6-5 to bar insurers from selling homeowner's policies that allow assignment of proceeds to a contractor within one year of a natural disaster.
• Section 4 sets the insurance provision (Section 3) to take effect January 1, 2026 for policies issued or renewed after that date, with the rest of the Act effective July 1, 2025.

1. 2025-05-08Effective Date 2025-07-01
2. 2025-05-08Act 71
3. 2025-05-08Senate Date Signed by Governor (Senate)
4. 2025-04-10Senate Sent to Governor (Senate)
5. 2025-04-04Senate Agreed House Amend or Sub (Senate)
6. 2025-03-31House Passed/Adopted By Substitute (House)
7. 2025-03-31House Third Readers (House)
8. 2025-03-20House Committee Favorably Reported By Substitute (House)

• Larry Walker (R, SD-020)Primary sponsor
• Russ Goodman (R, SD-008)
• Mike Hodges (R, SD-003)
• Blake Tillery (R, SD-019)
• Sam Watson (R, SD-011)
• Carden Summers (R, SD-013)
• Billy Hickman (R, SD-004)
• Chuck Payne (R, SD-054)
• Brian Strickland (R, SD-042)
• Max Burns (R, SD-023)
• Ed Setzler (R, SD-037)
• Matt Brass (R, SD-006)
• Randy Robertson (R, SD-029)
• Lee Anderson (R, SD-024)
• Kay Kirkpatrick (R, SD-032)
• Ricky Williams (R, SD-025)
• Frank Ginn (R, SD-047)
• Drew Echols (R, SD-049)
• Timothy Bearden (R, SD-030)
• Marty Harbin (R, SD-016)
• Shawn Still (R, SD-048)
• Bo Hatchett (R, SD-050)
• Brandon Beach (R, SD-021)
• John Kennedy (R, SD-018)
• Jason Anavitarte (R, SD-031)
• Steve Gooch (R, SD-051)
• Leesa Hagan (R, HD-156)

1. PassedSenate voteMarch 4, 2025

   53 yea, 1 nay (0 not voting, 2 absent)

   Passage By Substitute: Senate Vote #157

2. PassedHouse voteMarch 31, 2025

   163 yea, 1 nay (5 not voting, 11 absent)

   Passage: House Vote #368

3. PassedSenate voteApril 4, 2025

   49 yea, 1 nay (5 not voting, 1 absent)

   Agree To House Substitute: Senate Vote #447

• consumer protection
• natural disaster recovery
• homeowners insurance
• contractor regulation
• insurance law