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  1. #1
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    Default Alert Texas Inspectors

    Texas Senate Bill SB914 was amended today to include the requirement for mandatory E/O. I recognize that there are those of you who are proponents of carrying E/O. I do not wish to debate that here. It's been beaten to death.

    However, I would like to invite you, all of you, to go back through the TREC Advisor files for as far back as they go and count the total number of sanctions against Inspectors. TREC - Disciplinary Actions Main Page

    This amendment is not consumer driven. It is driven by the industry most certain to profit from it and it is driven by a State government so dishonest that it has taken UNUSED monies from the recovery fund and added it to the general budget. There is a surplus because there have not been enough claims to use the monies already collected from Inspectors.

    The following is an exact reprinting. I have inserted no diacritical markings.

    ""Amend CSSB 914 (House committee printing) by inserting the
    following appropriately numbered SECTIONS and renumbering
    subsequent SECTIONS of the bill accordingly:
    SECTION ____. Section 1102.114, Occupations Code, is
    amended to read as follows:
    Sec. 1102.114. ISSUANCE OF LICENSE. The commission shall
    issue the appropriate license to an applicant who:
    (1) meets the required qualifications; [and]
    (2) pays the fee required by Section 1102.352(a); and
    (3) offers proof that the applicant carries liability
    insurance with a minimum limit of $100,000 per occurrence to
    protect the public against a violation of Subchapter G
    .
    SECTION ____. Section 1102.203(a), Occupations Code, is
    amended to read as follows:
    (a) A person may renew an unexpired license by paying the
    required renewal fee to the commission before the expiration date
    of the license and providing proof of liability insurance as
    required by Section 1102.114(3)
    .""

    Similar Threads:
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  2. #2
    Richard Rushing's Avatar
    Richard Rushing Guest

    Default Re: Alert Texas Inspectors

    That does not specify...

    General vs Professional. Although, we know where they are headed with this abomination...

    S.O.B.!!!

    RR


  3. #3
    imported_John Smith's Avatar
    imported_John Smith Guest

    Default Re: Alert Texas Inspectors

    Bend over and grab your ankles should this one pass.
    Why dont other licensees have to carry E/O insurance?
    This should be a sure fire way to drive out inspectors that arent doing a whole lot of inspections. (Me included).

    Hopefully common sense will prevail.


  4. #4
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    Default Re: Alert Texas Inspectors

    Looks like General Liability Insurance to me per the statement, not E&O.

    If so, should cost you make 1000. to 1500. a year.

    If its E&O, different story.


  5. #5
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    Default Re: Alert Texas Inspectors

    I have considered that. After hearing from Danny South it has been explained as E/O. I am waiting for clarification from the State. Not holding my breath for the answer.

    The only reason some people get lost in thought is because it's unfamiliar territory.
    - Paul Fix

  6. #6
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    Default Re: Alert Texas Inspectors

    Sounds like the same liability that just about all the other trades such as the PC industry has to carry.

    My insurance man told me this was coming months ago.

    I'll have a balloon policy that will cover both of my businesses.


  7. #7
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    Default Re: Alert Texas Inspectors

    If it is E&O it would or should say Professional Liability Insurance or Errors and Omissions Insurance. As it is now written it would be General Liability.

    Do inspectors in TX have to have GL now?

    Scott Patterson, ACI
    Spring Hill, TN
    www.traceinspections.com

  8. #8
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    Default Re: Alert Texas Inspectors

    Scott,

    No we don't.

    I already carry it myself. General Liability that is.


  9. #9
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    Default Re: Alert Texas Inspectors

    Quote Originally Posted by Scott Patterson View Post
    If it is E&O it would or should say Professional Liability Insurance or Errors and Omissions Insurance. As it is now written it would be General Liability.
    That was my first assumption. TAREI is saying it's E/O.

    I feel the thread morphing into a virtues discussion again. My concerns are that the issue is not a consumer driven consumer protection issue. It has been spearheaded by the insurance industry. That's how Rick's agent knew it was coming. This amendment was just tacked on. It wasn't even part of the original discussions or the debate. And it's an issue of our State looking for revenue. They want to turn over the recovery fund to the general fund and this is an opportunity.

    The only reason some people get lost in thought is because it's unfamiliar territory.
    - Paul Fix

  10. #10
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    Default Re: Alert Texas Inspectors

    Like other have said, that's General Liability innsurance.

    I used to carry $2 mil worth, it was cheap enough.

    Jerry Peck, Construction / Litigation Consultant
    Construction Litigation Consultants, LLC ( www.ConstructionLitigationConsultants.com )
    www.AskCodeMan.com

  11. #11
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    Default Re: Alert Texas Inspectors

    I thought it was general liability insurance at first but I am now almost convinced that E&O is what they are talking about.

    The wording is...

    "...to protect the public against a violation of Subchapter G."

    Subchapter G from the Texas Occupations Code regarding inspectors is short and sweet and says...

    "SUBCHAPTER G. PROHIBITED ACTS
    Sec. 1102.301. NEGLIGENCE OR INCOMPETENCE.
    An inspector may not perform a real estate
    inspection in a negligent or incompetent manner."

    "Negligent and incompetent" is the term TREC uses when an inspector has not followed the SoP. In other words, when the inspector has missed something. Now that's starting to sound more and more like errors and omission insurance to me.




  12. #12
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    Default Re: Alert Texas Inspectors

    Read section 1102.353.d. This is why I'm so angry about MANDATED any kind of the I word.
    http://www.trec.state.tx.us/pdf/rela/RELA_Sept_2005.pdf

    Read my summary of the data from TREC regarding discipline occurrences for Texas inspectors from 1996 to May 2007, 10 1/4 years. It is based on data from TREC.
    TREC - Disciplinary Actions Main Page

    This is more than shameful. In my opinion it is no less than criminal collusion between the Insurance and members of the Texas Legislature. The only other explanation would be immeasurable stupidity. I guess I can accept that.

    The only reason some people get lost in thought is because it's unfamiliar territory.
    - Paul Fix

  13. #13
    David Banks's Avatar
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    Default Re: Alert Texas Inspectors

    "This is more than shameful. In my opinion it is no less than criminal collusion between the Insurance and members of the Texas Legislature."

    And that surprises you with politicians?


  14. #14
    Richard Rushing's Avatar
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    Default Re: Alert Texas Inspectors

    It does look, at first glance, as General Liability. However, what Philip posted hits the bell hard with a loud and ringing sound of Professional Liability Insurance.

    S.O.B.!!! This crap sucks...

    Oh well... EVERY INSPECTION IN TEXAS SHOULD IMMEDIALY JUMP $100-$150 PER INSPECTION!!!! NO EXCEPTIONS (except those higher ).

    The drastic jump will be mandated by not only premiums but also in occurrances of claims that will now be 10-fold. You'll now have every Tom-Dick-and-Harry & Assoc. advertising on the cheap television networks for litigation and trying to drum up business for their law firm while going after their new insurance treasure chests.

    Oh well... just raise prices!!! Sorry Mr. & Mrs. home-buyer-- don't blame us, blame the State of Texas for breaking a system that was already fixed.

    I know I won't be using any E&O company who specifically bashes "Other" organizations on private BB's...

    Rich

    Last edited by Richard Rushing; 05-18-2007 at 03:25 PM.

  15. #15
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    Default Re: Alert Texas Inspectors

    I have worked under mandated E&O for right at 6 years.

    I really don't care for the state telling me I must have it, but it does tend to keep the number of inspectors down. We have very few if any part-time inspectors. Also I have not seen an increase in claims, like everyone says happens. I just have not seen it.

    Scott Patterson, ACI
    Spring Hill, TN
    www.traceinspections.com

  16. #16
    imported_John Smith's Avatar
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    Default Re: Alert Texas Inspectors

    Richard, you are absolutely right. Im not a TAREI member but had been thinking about joining for some time. Nows a good time, hopefully they have enough stroke to help get this stopped. If not, I would absolutely have to raise my costs $100 or more per inspection to offset the cost of the insurance.

    Good time to research the inner workings of TREC and bombard them (elected officials) with emails, phone calls, letters, etc.

    The TREC advisor disciplinary page is about 95% actions against real estate agents. Are they required to have E/O insurance? I dont know.


  17. #17
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    Default Re: Alert Texas Inspectors

    The realtors have to carry E&O per transaction.

    They pay so much out of each transaction it when they close a deal.

    Not near what the cost is for HI's.

    An agent told me yesterday, she pays less than 800. a year. She also a broker.


  18. #18
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    Default Re: Alert Texas Inspectors

    As Scott said above, E & 0 tends to weed out those not serious about the business, HOWEVER, mandating or supporting E & O to limit the competition is JUST WRONG.

    General Liability here in Kentucky costs me less than $300.00 per year for $1,000,000.

    Erby Crofutt, Georgetown, KY - Read my Blog here: Erby the Central Kentucky Home Inspector B4 U Close Home Inspections www.b4uclose.com www.kentuckyradon.com
    Find on Facebook at: https://www.facebook.com/B4UCloseInspections

  19. #19
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    Default Re: Alert Texas Inspectors

    I pay $450/year for general liability.

    I do not like mandates. However, I carry that GL insurance by choice because I learned the hard way when I was contracting remodel work.

    I also carry E/O and that is a different story. It is very expensive and takes quite a few inspections to cover the price. The sad part is that I do not have much faith that it would actually work to my benefit if I ever had to use it.

    To each their own, but I trust the Texas governing bodies and their motivations about as far as I can see past our governer's big hair (read Merk and mandated vaccinations).

    Eric


  20. #20
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    Default Re: Alert Texas Inspectors

    I spoke with TREC this morning and was told that it is their understanding that the intent of the amendment is indeed for E&O and not just general liability.

    John said...
    "Good time to research the inner workings of TREC and bombard them (elected officials) with emails, phone calls, letters, etc."
    Keep in mind that this is not TREC's doing and there are no elected officials at TREC to contact. The Real Estate Commissioners and the Administrator at TREC are appointed by the Governor and everyone else is just a state employee.

    This particular personal foul is coming from the legislature.



  21. #21
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    Default Re: Alert Texas Inspectors

    Quote Originally Posted by Phillip Stojanik View Post
    I spoke with TREC this morning and was told that it is their understanding that the intent of the amendment is indeed for E&O and not just general liability.

    Thank you for getting the answer quickly.



    This particular personal foul is coming from the legislature.
    Amen. More specifically, we are being fleeced by them and their buddies in the insurance industry.

    The only reason some people get lost in thought is because it's unfamiliar territory.
    - Paul Fix

  22. #22
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    Default Re: Alert Texas Inspectors

    Legislative Alert: From Danny South e-mail


    Inspectors of Texas:


    Please understand, I could easily spend 3-hours on this email explaining what all has transpired over the past 48-hours. I will not burden you.


    Unfortunately we were unsuccessful in our earlier attempt(s) today of getting this amendment of “mandatory” E & O insurance to SB914 removed as we thought we would as of late last night.


    Below is my version of the TAREI position statement just sent to the following Legislators. Long story short, various individuals have not been telling the truth to our Lobbyist and relaying this information back to Sen. Shapleigh & Sen.Brimer’s offices.


    As of 10:30 PM last night, we were told TAR was not in favor of this amendment and that they were going to help our cause. Today, as of 9:30 AM, we were told TAR was taking a “neutral” position. At 2:30 PM, we were told TAR was “in favor” of this amendment. As of 5:17 PM, this does not appear to be the case…or so we are now told from Mr. Mark Lehman w/TAR.


    Per my conversation as of 5:15 PM with Sen. Shapleigh’s Chief of Staff, Eduardo Hagert, he stated both TAR & Sunset stated: “This amendment would benefit the Consumers in Texas”.


    I encourage you to take immediate action to the following individuals. This exact letter (except Word protected) was just sent to the individuals below.


    Please do not simply “forward” this position statement. Form/chain letters do us NO GOOD. I have sent this “unlocked/unprotected” Word document so you may cut/paste for the key points including any other positive comments you may add. Your comments should be positive regarding pros/cons on this amendment for the Inspection Industry.


    As stated in the provided letter, if the “intent” for the amendment is Consumer Protection, why not add the Brokers/Agents to have mandatory E & O. You may also wish to consider adding language regarding E & O for Builders. Here’s another thing to ponder when contacting your Legislators…

    With the proposed mandatory E & O insurance, every Inspector in Texas for fear of being sued for the most minute item (remember…you now have “pockets”) will now absolutely “nit/pic” & destroy every property Inspection they perform. I wonder how the RE community will respond when their deals fall thru…repeatedly.


    Individuals that must be contacted to call/email are as follows. I would also encourage you to contact your Rep. & Senators from your respective areas as well.


    Sen. Eliot Shapleigh

    Eliot.Shapleigh@senate.state.tx.us

    (O) 512 463 0129

    Chief of Staff: Mr. Eduardo Hagert


    Sen. Kim Brimer

    Kim.Brimer@senate.state.tx.us

    (O) 512 463 0110

    Chief of Staff: Ms. Jill Crocker


    Rep. Vicki Truit

    Vicki. Truitt@house.state.tx.us

    (O) 512 463 0690


    Rep. Byron Cook

    Byron.Cook@house.state.tx.us

    (O) 512 463 0730


    Rep. Lois Kolkhorst

    lois.kolkhorst@house.state.tx.us

    (O) 512 463 0600


    Rep. Ruth McClendon

    Ruth.McClendon@house.state.tx.us

    (O) 512 463 0708


    Rep. Dan Flynn

    Dan.Flynn @house.state.tx.us

    (O) 512 463 0880



    Ladies & Gentlemen, we are faced with yet another example of how the Inspectors in Texas get slammed at the “11th hour” during a Legislative Session. We must act now. At this point, we have absolutely nothing to lose & possi bly everything to gain.


    I implore you to let your voices be heard. We still have a shot of getting this amendment pulled from the Senate, but…time is quickly running out. You must take action this weekend so the Legislators get this first thing Monday morning.


    Thank you.

    Sincerely,

    Daniel F. South
    TAREI President 2007-2008
    ************************************************** ************
    May 18, 2007


    Re: Amendment to SB914



    Hon. Senator Shapleigh,


    Texas Association of Real Estate Inspectors TAREI is considered to be the vanguard of the Inspection Industry in Texas since 1977. As current President, I urge you to pull the amendment to SB914, requiring E & O “liability insurance” for all TREC Inspectors.


    Considering th e “11th hour” tactics utilized for this amendment, I have no choice but to release a Legislative Alert to all 4,400+ Texas Inspectors on this issue. Unfortunately, time is not on our side. I have compiled the following facts for your consideration in removal of said amendment:


    1. As you are aware, Sunset completed their audit of TREC. On page 56 of the Sunset repo rt, FY05 resulted in 5,020 Complaints against Real Estate Brokers/Agents. Complaints on Inspectors were 235. The Inspector is the only non-biased, true third-party for Consumer protection in a real estate transaction.

    2. If you look at the TREC provided data per their website for the past 10 years on Inspector complaints, the total numbers for violations and monies out of the Recovery Fund are: 53-Disciplinary Actions totaling $ 88,500.

    3. With mandatory E & O, costs for Consumers on Inspections will automatically increase a minimum of 30-40% overnight.

    4. Considering the option of mandatory E & O, the current system in place withi n TREC for more than 25 years for Complaint Resolution for Consumers, also known as the Recovery Fund will seize to exist. By Legislative mandate, this Fund is required to be kept at a minimum of $ 450,000 annually. I would suspect TREC’s Budget will have to find these monies thru another revenue stream as well.

    5. This past year, TREC had an “Emergency Hearing” for reciprocity for Inspectors in other states (Louisiana) to practice in Texas. With inco rporating “mandatory” E & O insurance, this will surely eliminate the reciprocity agreement for other Inspectors attempting to establish their businesses in Texas.

    6. For the mandatory E & O insurance, please consider the following:

    Ø Many Inspectors cannot qualify for E & O for either the cost(s) or, if he/she has been involved with any form of previous Litigation. (This is almost guaranteed for exemption)

    Ø There are approximately 6 Carriers in Texas who offer E &a mp; O for Inspectors. Out of the approx. 4,400 + Inspectors who will now be “required” to carry, who will write this policy and…at what cost?

    Ø 2006 Sunset’s recommendations, nor TREC, nor TAR has recommended “mandatory” E & O for Inspectors. That said, if we look at the Sunset provided numbers from above with over 5,000 Complaints from Agents/Brokers, if this amendment was truly concerned about Consumer Protection, you would also include “mandatory” E & O for the Real Estate community (Agents/Brokers) as well.

    Ø For certain, this requirement will cause numerous Inspectors to close their businesses. That said, for the individuals who simply cannot afford the $ 4,000-$ 7,000/year in costs for E & O, is the state of Texas prepared to generate a “Risk Management” E & O Insurance pool considering we are a “right t o work” state?



    Another point of contention of said amendment is that we have confirmed as of this afternoon, neither TAR nor Sunset is in favor of this amendment. As requested on behalf of the Inspectors in Texas, why this amendment?


    As eluded to, if in fact this amendment is to “take aim” at Consumer Protection, where is the public outcry? Where are the Consumers who have been harmed?


    There are none as indicated by the Sunset Review process. The Recovery Fund appears to be working well today, as it has been for the past 25+ years.


    I strongly urge you to remove the amendment from SB914.


    Thank you.

    Sincerely,

    Daniel F. South
    TAREI President 2007-2008


    badair http://www.adairinspection.com Garland, TX 75042 TREC # 4563
    Commercial-Residential-Construction-EIFS-Infrared Thermography
    life is the random lottery of events followed by numerous narrow escapes

  23. #23
    imported_John Smith's Avatar
    imported_John Smith Guest

    Default Re: Alert Texas Inspectors

    Thanks for the information Barry. I have already contacted all of the house/senate members you referenced in your email. We all have to stick together on this to stop this bad legislation. I see no benefit to anyone in this deal should it pass other than insurance companies, politicians and trial lawyers.


  24. #24
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    Default Re: Alert Texas Inspectors

    Inspectors,
    As you compose your letters, I would encourage that you also add to your list that LAWYERS IN TEXAS ARE NOT MANDATED TO CARRY E&O INSURANCE.

    I would also encourage that any of you who have personal relationships with members of the news media, use it now! There is a reason that all this came down on Friday. It gives us almost no hope of responding in time.

    I will be addressing a letter to TAREI requesting that they no longer allow E&O carriers as sponsers or participants in any activity. This amendment was driven by them, because they have been unsuccessful in selling us the policies.

    Finally, I hope to encourage TAREI to establish a fund specifically for filing suit to assure, on behalf of the outraged consumer, to assure that lawyers and all participants in Real Estate transactions be mandated to carry E&O insurance.

    The only reason some people get lost in thought is because it's unfamiliar territory.
    - Paul Fix

  25. #25
    Mike Boyett's Avatar
    Mike Boyett Guest

    Default Re: Alert Texas Inspectors

    Since I live in Austin I will possibly attempt to hand deliver my written opposition response to the amendment to the two senators on Monday or Tuesday. If any of you would like for me to include your written response along with mine then e-mail a .pdf or Word file to me at borntxn@gmail.com asap! Please keep it to one page if at all possible and formatted as a formal letter, not a copy of an e-mail you may send separately. Also, please consider this as in addition to, not in lieu of, any other means you plan to use to get your opinion to the legislators. I plan to only deliver to the two senators.

    Last edited by Mike Boyett; 05-19-2007 at 03:18 PM.

  26. #26
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    Thumbs down Re: Alert Texas Inspectors

    "Requiring" any person or profession to carry insurance of any type increases the potential for lawsuits. It does nothing for the consumer. It certainly helps keep trial attorneys employed. At the expense of the consumer, I would add. Certainly, high insurance premiums will result in higher professional fees from home inspectors!

    Randall Aldering GHI BAOM MSM
    Housesmithe Inspection
    www.housesmithe.com

  27. #27
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    Default Re: Alert Texas Inspectors

    I do hope you are keeping those cards and letters coming. I have attached mine for any who may care to read it.

    In the event this Bill passes with the addressed amendment in place, it is my intention to see if I can get any of the media interested in how this amendment could have been attached. This needs investigation. To that point, any of you who are willing, if you will email me (pdf or word) the contact names or titles at:
    1. TV stations in your area that you recognize as leading your market regarding consumer or ombudsman activity
    2. Newspapers that are known to investigate and report corruption in Government agencies and the legislature
    I will take it from there. I will not give up until my resources are exhauted. If I do not get interested responses, I will take the information to other newspapers and Media in major cities outside Texas. Your names will not be used without your permission.

    It is my goal that either we will not be mandated to carry this particular insurance or that every profession mentioned in my letter will be mandated to carry it.

    My personal email is: tcwalker@c5comm.com

    Attached Files Attached Files
    The only reason some people get lost in thought is because it's unfamiliar territory.
    - Paul Fix

  28. #28
    Mike Boyett's Avatar
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    Default Re: Alert Texas Inspectors

    Quote Originally Posted by Mike Boyett View Post
    Since I live in Austin I will possibly attempt to hand deliver my written opposition response to the amendment to the two senators on Monday or Tuesday.
    OK, Mine and two other inspector's opposition letters were hand delivered to Senators Shapleigh and Brimer this morning. With luck, they will be read before the next vote on SB914 this week.


  29. #29
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    Default Re: Alert Texas Inspectors

    Thank you, Mike.

    The only reason some people get lost in thought is because it's unfamiliar territory.
    - Paul Fix

  30. #30
    james walker's Avatar
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    Angry Re: Alert Texas Inspectors

    Brian

    As a Texas Inspector the below statement offends and disturbs me with what has transpired in the last 3/4 days!

    InspectionNews e-mail is Sponsored By:
    FREA Insurance FREA:Insurance for Home Inspectors and Appraisers - Home
    ******************************

    James Walker


  31. #31
    Mike Boyett's Avatar
    Mike Boyett Guest

    Default Re: Alert Texas Inspectors

    As of 7pm, Monday, 5/21 it appears that SB914, as amended, was passed by the Senate today and is on to the Gov for signature.

    See: http://www.legis.state.tx.us/BillLoo...=SB914#vote206


  32. #32
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    Default Re: Alert Texas Inspectors

    I might not be the brightest bulb in the box, but it seems this entire bill was proposed, considered and voted into place without much public input. Seems like a backroom deal with some slick politicians getting their palms greased while protecting their contributors interest.

    Jim Luttrall
    www.MrInspector.net
    Dallas, Texas

  33. #33
    imported_John Smith's Avatar
    imported_John Smith Guest

    Default Re: Alert Texas Inspectors

    It is truly amazing how fast this went through the house and senate. I would personally like to thank everyone who called, wrote emails, and especially those that hand delivered comments to the politicians.

    Whats next? Should Perry sign, everyone should immediately raise their fees 50% to help offset the cost of insurance. I think we have been somewhat selling our services too cheap for some time. TREC wants to play hard ball with licensing, the politicians want to play hard ball with insurance, inspectors should be fairly paid for providing a service that realistically could leave them in a court of law on one bad statement in a report.

    Enough is enough.


  34. #34
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    Default Re: Alert Texas Inspectors

    Quote Originally Posted by Mike Boyett View Post
    As of 7pm, Monday, 5/21 it appears that SB914, as amended, was passed by the Senate today and is on to the Gov for signature.

    See: http://www.legis.state.tx.us/BillLoo...=SB914#vote206



  35. #35
    Mike Boyett's Avatar
    Mike Boyett Guest

    Default Re: Alert Texas Inspectors

    No, SB914 & its companion bill HB3250 took months of preparation, debate and open discussion in the legislature and nothing was underhanded, in my opinion, on how they were developed. It is only the very, very last minute E&O amendment inserted last Thursday that was a sleight of hand by someone. The bills have been open for all to see and comment on for anyone that wanted to follow them in the law making process. Go question Rep Brian McCall out of Plano to find out why he authored the amendment.


  36. #36
    George Koehl's Avatar
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    Default Re: Alert Texas Inspectors

    Quote Originally Posted by imported_John Smith View Post
    It is truly amazing how fast this went through the house and senate. I would personally like to thank everyone who called, wrote emails, and especially those that hand delivered comments to the politicians.

    Whats next? Should Perry sign, everyone should immediately raise their fees 50% to help offset the cost of insurance. I think we have been somewhat selling our services too cheap for some time. TREC wants to play hard ball with licensing, the politicians want to play hard ball with insurance, inspectors should be fairly paid for providing a service that realistically could leave them in a court of law on one bad statement in a report.

    Enough is enough.
    It really is not that I want to raise my rates- raising my rates won't hurt TRECs, It will benefit the government which obviously doesn't care what the public thinks (Taxes), it will only hurt my clients who won't get a home inspection because it cost too much, and my family because selling a job will be harder.

    But, I am now looking an additional 3500 a year just so my company can continue doing inspections. My rates have to go up.

    All inspectors (even those who had E&O) should raise their rates as well, no your cost of business isn't going up (those with E&O)- UNTIL- the Lawsuits and settlements start rolling in. Insurance is bases on risk. As suits and settlements arise (you don't even have to be involved) and your rates will begin to increase because you, being out there doing your job is a risk to the insurance company.


    Make your self a cushion, you'll probably need it .


  37. #37
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    Default Re: Alert Texas Inspectors

    Quote Originally Posted by james walker View Post
    Brian

    As a Texas Inspector the below statement offends and disturbs me with what has transpired in the last 3/4 days!

    InspectionNews e-mail is Sponsored By:
    FREA Insurance FREA:Insurance for Home Inspectors and Appraisers - Home
    ******************************

    James Walker
    This direct quote from Frea's site offends me. It's an outright lie.

    In the past few years there has been a significant increase in the number of claims filed against inspectors. Now more than ever, E&O insurance is a necessity for all home inspection businesses. FREA offers a comprehensive Claims-Made policy with the best rates and lowest deductibles.

    The only reason some people get lost in thought is because it's unfamiliar territory.
    - Paul Fix

  38. #38
    Richard Stanley's Avatar
    Richard Stanley Guest

    Default Re: Alert Texas Inspectors

    I have read the previous posts. I do not see in the bill, or its references, where it specifically states E & O. I only see general liability, not professional liability, ($100,000 per occurrence). That isn't the terminology for E & O, is it? Does anyone actually know for sure..? I also do not see when it goes into effect -- other than at issuance of a license or renewal. A staggered effective date will require some to acquire it and some not within the first 2 year period - that could skew the competition factors.


  39. #39
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    Default Re: Alert Texas Inspectors

    Richard, I just read the amendment which requires insuirance to protect the public from violations of sub chapter G of the Texas occupations code.
    Sub chapter G. Prohibited acts
    1102.301. Negligence or incompetence. An inspector may not perform a real estate inspection in a negligent or incompetent manner.

    That is pretty much the definition of Errrors and Omisssions the way I understand it. I am still trying to digest this thing though.

    The basic thing that really gets to me though is the witness in favor of this bill is the TAR (Texas Ass. of Realtors) representative. Big money wins again.
    The realtors may have shot themselves in the foot on this one though. In a few years, there will likely be far fewer inspectors since the part-timers won't be as likely to spend the extra $3-$4K and won't renew their license.
    The drive by inspectors will soon have enough claims to be denied insurance and thus their license. The net result MAY be fewer, better inspectors, who charge enough to stay in business and will not compromise with a "Fair to the house" report.
    Intentional mis-spellings of certain words.
    Jim

    Jim Luttrall
    www.MrInspector.net
    Dallas, Texas

  40. #40
    Richard Stanley's Avatar
    Richard Stanley Guest

    Default Re: Alert Texas Inspectors

    I sent an inquiry to trec earlier today re: What kind of insurance the bill requires and the effective date:
    I got this answer a few minutes ago:

    The effective date is 9/1/07. TREC is still in the process of determining
    what type of liability insurance will be required.

    I hope this information is helpful to you.

    Loretta DeHay
    General Counsel
    Texas Real Estate Commission


  41. #41
    Mike Boyett's Avatar
    Mike Boyett Guest

    Default Re: Alert Texas Inspectors

    Quote Originally Posted by Jim Luttrall View Post
    The basic thing that really gets to me though is the witness in favor of this bill is the TAR (Texas Ass. of Realtors) representative.
    Jim....could you please explain that a little more.


  42. #42
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    Default Re: Alert Texas Inspectors

    After going to the link someone else posted, you can go to the list of people responsible for filing, supporting, and witnesses appearing in favor of the bill. See for yourself.

    http://www.legis.state.tx.us/BillLoo...80R&Bill=SB914

    Jim Luttrall
    www.MrInspector.net
    Dallas, Texas

  43. #43
    Mike Boyett's Avatar
    Mike Boyett Guest

    Default Re: Alert Texas Inspectors

    Jim, I'm familiar with the Texas Legislature's website and have been using it to follow SB914 the last few days. I guess there is so much information there that I'm just overlooking the information you indicated was there, i.e. that a TAR representative testified in support of the amended bill. Could you please hold my hand and show me exactly where it says that? I'd like to document that fact if I can locate it. Now, timing is important...if a TAR representative simply supported SB914 before the E&O amendment then that's exactly what I would have expected of them and would have no problem with that. If that TAR representative directly supported the E&O amendment then I'd like to make note of that though.


  44. #44
    Jake Guerrero's Avatar
    Jake Guerrero Guest

    Default Re: Alert Texas Inspectors

    Quote Originally Posted by Mike Boyett View Post
    Go question Rep Brian McCall out of Plano to find out why he authored the amendment.
    From McCall's Bio:

    "He is an advisor to Guaranty Insurance and Quest Network Business Solutions."


  45. #45
    Richard Stanley's Avatar
    Richard Stanley Guest

    Default Re: Alert Texas Inspectors

    From McCall's Bio:

    "He is an advisor to Guaranty Insurance and Quest Network Business Solutions."

    And guess what they sell ---

    https://www.insurance.guarantygroup....=pro_Liability

    That should be illegal.

    Guess where I won't buy it.


  46. #46
    Richard Stanley's Avatar
    Richard Stanley Guest

    Default Re: Alert Texas Inspectors

    I sent this to the Gov.

    "Re: SB914
    An ammendment to this bill was made very late in the process (last Thursday) by a member (McCall) to require liability insurance for home inspectors. McCalls bio indicates he is an advisor to an insurance company (Guaranty) that just happens to sell said insurance. The TREC inspector recovery fund has functioned quite well and returned monies to the state general fund for several years.. It does not need fixing. I urge your veto of this obvious conflict of interest. "

    Probably worthless, but, ----


  47. #47
    George Koehl's Avatar
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    Default Re: Alert Texas Inspectors

    Quote Originally Posted by Richard Stanley View Post
    I sent an inquiry to trec earlier today re: What kind of insurance the bill requires and the effective date:
    I got this answer a few minutes ago:

    The effective date is 9/1/07. TREC is still in the process of determining
    what type of liability insurance will be required.

    I hope this information is helpful to you.

    Loretta DeHay
    General Counsel
    Texas Real Estate Commission
    I wrote to Rep. McCall for clarification about what type of insurance the bill made mandatory, but since I am not from district 66- I doubt I will receive a reply.

    maybe someone from district 666 could ask him as well.

    oops, that must have been a typo and my backspace doesn't seem to be working

    Last edited by George Koehl; 05-22-2007 at 02:17 PM.

  48. #48
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    Default Re: Alert Texas Inspectors

    WITNESS LISTSB 914Senate Committee ReportGovernment OrganizationMarch 26, 2007 - 1:30 PM or upon adjournment
    Registering, but not testifying:
    For: Gonzalez, Daniel Consultant (Texas Association of Realtors), Austin, TX
    On: Alexander, Karen (Texas Real Estate Commission), Austin, TX DeHay, Loretta Attorney (Texas Real Estate Commission), Austin, TX Hassumani, Sabrina Assistant Adminstrator (Texas Real Estate Commission), Austin, TX Ninaud, Christian Policy Analyst (Sunset Advisory Commission), Austin, TX

    This witness list is where I was getting my information. It does appear that the amendment was made after the date of the witness list. I doubt at this late date that there will ever be a full accounting of who was actually responsible and the reasons, but then I am not up on the political process and all the various ways to manipulate the system.

    Jim Luttrall
    www.MrInspector.net
    Dallas, Texas

  49. #49
    Mike Boyett's Avatar
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    Default Re: Alert Texas Inspectors

    Jim thanks, that clears that up I think. I'm only basing my opinion of TAR's position on the letter that TAREI sent out Friday and that said that TAR was waffling on whether they supported the amendment or not. I'm sure they do support it now that it is passed.


  50. #50
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    Default Re: Alert Texas Inspectors

    Higher costs to the Inspector= Higher inspection fees passed onto Client

    Higher Fees to the Client= Less Clients to Purchase a Home

    Less HomeBuyers= Less Commission Fees to Agents

    Every Realtor I've talked to the last few days on this subject say they had no idea this was going on.

    They all ask why we can't pay for E&O as they do as a group and per transaction?

    Why could this not be done as a large group as themselves?


  51. #51
    imported_John Smith's Avatar
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    Default Re: Alert Texas Inspectors

    Not picking on them, but where was representation from TAREI on this? They found out about it on Friday like almost everyone else? I looked at their web site today and there isnt even any mention of this.


  52. #52
    George Koehl's Avatar
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    Default Re: Alert Texas Inspectors

    Quote Originally Posted by Rick Hurst View Post
    Higher costs to the Inspector= Higher inspection fees passed onto Client

    Higher Fees to the Client= Less Clients to Purchase a Home

    Less HomeBuyers= Less Commission Fees to Agents

    Every Realtor I've talked to the last few days on this subject say they had no idea this was going on.

    They all ask why we can't pay for E&O as they do as a group and per transaction?

    Why could this not be done as a large group as themselves?

    I think for one thing, Inspectors (not all) are very independent (lone range-like mentality); it is my impression, that Realtors\Agents don't have the mindset as inspectors. I believe (Unfounded opinion) a lot has to do with the Inspection Industry's roots from the Trade industry- vs.- a service industry.

    I don't doubt it would be possible for this (ref-> Group E&O) to occur, but not in the current state of affairs.

    1st- we are not united (we are too busy playing cut-rate wars. And trying to figure out how to get the biggest piece of the pie. (again not all))
    2nd- we are still under the control of TREC (something I doubt they will give up)

    It doesn't surprise me one bit that Realtors\Agents didn't know about this, at least on the individual level. When an amendment get tacked on that late in the game, I would guess only a few people knew about it, and it was purposed only to benefit a select few; otherwise, if it was an amendment which was in the public\consumer interest, there would have been rumblings and discussion prior to the Thursday “sneak” attachment. I would (another uneducated guess) believe the possibility of some of the “higher-up” in TAR to have known and approved of the amendment, but unofficially speaking. And, if that is the case, TAR could come out smelling like roses while they leave REP. McCall to twist in the wind and take the, limited, but full brunt of the spotlight. Perhaps the lateness in the addition of the amendment indicates, that whoever was behind this move, hoped to sneak in two small, ambiguous sentences into the governing rules. Think about it, TREC’s legal counsel doesn’t even know what type of insurance the new law references.

    Again, no hard proof or for that fact any supporting data other than gut-feeling.


  53. #53
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    Default Re: Alert Texas Inspectors

    Quote Originally Posted by Rick Hurst View Post
    Higher costs to the Inspector= Higher inspection fees passed onto Client

    Higher Fees to the Client= Less Clients to Purchase a Home

    Less HomeBuyers= Less Commission Fees to Agents

    Every Realtor I've talked to the last few days on this subject say they had no idea this was going on.

    They all ask why we can't pay for E&O as they do as a group and per transaction?

    Why could this not be done as a large group as themselves?

    If you are doing, let say 300 inspections a year, you might incur a per inspection cost of around $8 to $10 for E&O coverage. It is all relative to the amount of inspections that you are doing. Most folks that are in states with mandated E&O raise their rates I would say $20 to $30 to cover the extra cost, this is what I did in the two states I'm licensed in.

    As for group coverage you need to realize that the pool of home inspectors is a great deal smaller than that of the real estate agents. The more in the pool the lower the cost. It is estimated that we have around 40,000 home inspectors in the USA. Heck in TN, I think that they have right around 70,000 real estate agents!

    Scott Patterson, ACI
    Spring Hill, TN
    www.traceinspections.com

  54. #54
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    Default Re: Alert Texas Inspectors

    Robert,

    My logic is that with all the increased fees coming, not just with our fees, but with everything else (eg. gas prices) and all that money is going to be short sided for a bunch of folks.

    Hell, most folks we've seen are having to have the buyer make a contribution towards closing costs to get them in the title company.


  55. #55
    George Koehl's Avatar
    George Koehl Guest

    Default Re: Alert Texas Inspectors

    Quote Originally Posted by Scott Patterson View Post
    If you are doing, let say 300 inspections a year, you might incur a per inspection cost of around $8 to $10 for E&O coverage. It is all relative to the amount of inspections that you are doing.
    Quote Originally Posted by Scott Patterson View Post
    That is correct, but one of the big problems is getting to 300 inspections per year.

    If you were to take 2 weeks off for vacation, administrative, or industry related events (education\meetings); you are running 6 inspections per week, 50 weeks a year.

    At that rate, E&O would be easily worked into your price without much fuss. In fact, at that rate E&O would be a valuable business asset, I would gladly pay $8-$10 dollars for added protection.

    But for those who are not running at full capacity yet, the amount that you would have to raise your inspection price to offset or even cover the cost of E&O would be detrimental to your business.

    Quote Originally Posted by Scott Patterson View Post
    The more in the pool the lower the cost. It is estimated that we have around 40,000 home inspectors in the USA. Heck in TN, I think that they have right around 70,000 real estate agents!

    That too is a good point; if I remember correctly, Texas has over 100,000 (and maybe in the neighborhood of 175,000) agents. I know Texas has about 4400 Inspectors (and if that number is correct, it really bothers me that I can’t seem to get more work) and that doesn’t even make up the population of district 66.

    So add point 3 to the list-
    Lack of numbers


  56. #56
    George Koehl's Avatar
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    Exclamation Re: Alert Texas Inspectors

    Last edited by George Koehl; 05-22-2007 at 06:54 PM.

  57. #57
    imported_John Smith's Avatar
    imported_John Smith Guest

    Default Re: Alert Texas Inspectors

    The squeaky wheel gets the grease. I suggest everyone write their local papers opinions page and explain what is going on. It wont make a difference, whats done is done, but it can certainly make the politicians squirm. If you follow the money, its pretty clear these cats are on the take. I think TREC does have some liability in this. When do I get my refund for the money I paid into the general fund? No one has a claim on me.


  58. #58
    George Koehl's Avatar
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    Default Re: Alert Texas Inspectors

    It's not really over yet the governor still hasn't signed- he can send it back to be edited
    Contact the Governor,
    Let him know how this bill will hurt the econmy, increase lawsuits, hurt the real estate market in general

    we really have nothing to lose right now.


  59. #59
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    Default Re: Alert Texas Inspectors

    Well, I got my first solicitation today. It would be less interesting if I were a NACHI or ASHI member. I'm not. So in his scramble to fish in as many as he can, he even chooses not to recognize TAREI as a significant entity.

    I haven't checked him out yet to see if he has any personal ties to anyone in the TX legislature. In any event, there is no need for anyone to rush into anything. I understand the requirement will take effect Sept 1. I'm going to give it a couple of weeks to see if TAREI comes up with some sort of program.



    HMMM, I wonder if NACHI or ASHI played any part in what just happened?

    Dear Home Inspector:
    If you are a member of the National Association of Certified Home Inspectors, you might recognize my name from NACHI's very popular Message Board where I answer questions posed by members on a wide variety of legal and insurance topics. If you are a non-member you might know me from a Continuing Education Seminar called LAW AND DISORDER: Survival Strategies for the Professional Home Inspector in a Litigation Nation that I conduct nationwide and that has been approved for Continuing Education Credits by both ASHI and NACHI as well as the states of Massachusetts and New Jersey.
    As popular as the NACHI Message Board is, not every member visits it regularly and as a result you may not be familiar with one very huge membership benefit - the ability to secure Errors and Omissions Insurance at a preferred rate available only to NACHI members.
    When the program was first developed we beta-tested it in three states: Pennsylvania, New York and Florida. At the insurer's request we did not market the program aggressively because it wanted to test the user-friendliness of the NACHI web portal for handling insurance applications. Following a year-long test, we are now able to bring this preferred Errors and Omissions Program to our entire US membership. Members are saving on average about $700 over the premium that they had previously been paying.
    To obtain a quote go to: www.nachi.org/insurance and enter your User Name and Password. Premiums can be paid in four quarterly installments.
    If you are not a member of NACHI but would like to learn how much you could save on your Errors and Omissions Insurance, send an email to inspectorinsurance@verizon.net with the subject line: Tell Me How Much I Can Save On E & O Insurance. Include the following information: 1. Number of Inspectors; 2. Annual Revenue; 3. Number of Years you have been a home inspector; and 4. Whether you want coverage for A. Termites, B. Radon and/or C. General Liability.
    If you have any questions about this program, feel free to email or call me. I'll be happy to respond to your questions.
    IMPORTANT NOTE: You do NOT need to purchase "tail coverage" to switch from your current insurance company to the NACHI E & O Program. This is DISINFORMATION that is being promulgated by competing programs that are trying to staunch the loss of premium that the NACHI program is causing.
    When you apply for the insurance, you are asked for the "Retroactive Date" - this is the date on which you first became continuously insured. Example: If you first purchased E & O Insurance on January 1, 2002 and were continuously insured thereafter, your "Retroactive Date" would be January 1, 2002. Any claim that occurred subsequent to that date but which was not made until you switched insurance companies, would be covered by your new insurance company.
    THUS, THERE IS NO NEED TO PURCHASE TAIL INSURANCE WHEN SWITCHING TO THE NACHI PROGRAM! IF ANYONE TELLS YOU THAT TELL THEM THAT YOU ARE GOING TO RUN THAT QUESTION BY THE INSURANCE COMMISSIONER OF THEIR STATE AND SEE HOW QUICKLY THEY CHANGE THEIR TUNE.
    If you have any questions, call me directly. I'll be happy to answer any of your questions. And look for the LAW AND DISORDER Seminar when it comes to your city.
    Joseph A. Ferry
    Attorney at Law
    Two Penn Center Plaza
    Suite 200
    Philadelphia, PA 19102
    215.854.6444 tel.
    215.243.8202 fax
    josephferry@verizon.net email

    The only reason some people get lost in thought is because it's unfamiliar territory.
    - Paul Fix

  60. #60
    Mike Boyett's Avatar
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    Default Re: Alert Texas Inspectors

    Thom, I can assure you that no trade organization had anything to do with the E&O amendment. I can also assure you that Joe Ferry is a one of the good guys. Yes, he does represent a company providing E&O and I don't fault him one bit for letting Texas HI's know of that. I have my E&O thru them and it has saved me literally hundreds of dollars.


  61. #61
    John Onofrey's Avatar
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    Default Re: Alert Texas Inspectors

    Mike,

    Bad timing on Ferry's part gives the appearnace of an opportunist at work. I guess I'm not the only one that raised an eyebrow when I received the above email.

    After all, here we sit speculating how the attorneys will be aiming at the targets pasted on our backs by the E$O amendment - while simultaneously receiving solicitations of E$O insurance from an attorney.

    My first reaction was to think "this really sucks", even though I understand the TP E$O offer is a good one.


  62. #62
    Mike Boyett's Avatar
    Mike Boyett Guest

    Default Re: Alert Texas Inspectors

    John, I don't disagree with that at all. The e-mail was tacky, premature and he should have waited a while before sending it out.


  63. #63
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    Default Re: Alert Texas Inspectors

    Joe is sending that out to everyone that he has an email address for, not just the folks in TX. With Nick treating him like he did, I'm surprised that he is still calling it the NACHI insurance program. The kicker is that you now do not have to belong to NACHI, it is open to anyone.

    When I looked into the program I found that it was underwritten by the same parent company that does FREA, AIG. I think the division is Lexington that Towers is using. It's good coverage and the price is in line if not lower in some cases than FREA and others.

    Joe, is a good guy and very helpful.

    As said, none of the HI organizations had anything to do with it. Look at the Trial Lawyers and keep in mind a very high percentage of legislators are lawyers!

    Scott Patterson, ACI
    Spring Hill, TN
    www.traceinspections.com

  64. #64
    Richard Rushing's Avatar
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    Default Re: Alert Texas Inspectors

    I recieved the same email at three different addresses... My first thought was, "Friggin ambulance chasers are at it again."

    Rich


  65. #65
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    Default Re: Alert Texas Inspectors

    Mike, Scott,
    I don't ask for much in life; a little paranoia, the freedom to develop conspiracy theories. Is it so hard to let a guy have his dreams? Geez!

    I can call John to find out, but does anyone know what "coverage for the referring party means?" I hope it does not mean that we provide some form of coverage for the Realtor. That seems to be counter to being able to say that we work only in the best interest of our Clients. Additionally, if that is what it means, it seems that their E&O should be reciprocal.

    The only reason some people get lost in thought is because it's unfamiliar territory.
    - Paul Fix

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