I got this email from TAREI yesterday.
Dear TAREI Member,

As you all know by now, the legislative session is over and SB914 is on
Governor Perry's desk for signature. This Bill will make liability
insurance mandatory for all inspectors. The term "liability" is being
reviewed by the Attorney General's office and a determination of its
definition will be available to TREC soon. Until then, the TREC
Commissioners have passed a motion to define "liability" as Professional
Liability (Errors and Omissions) for inspectors. If your license renews
between now and September 1, 2007, you will be required to show proof of E&O coverage. We will keep everyone updated on the Attorney General's response.

Your TAREI Board of Directors has been in contact with several E&O providers
and are negotiating rates and coverage for our members. We are hoping to
the carrier we choose will provide payment options as well as per
transaction options. Initial proposals look promising and we are hoping to
choose the best proposal VERY soon. Again, we will keep everyone updated.

If you are a member of your local chapter, an email was released last week
regarding possible action with the Attorney General's office. The email
indicated that there is a possible option in which TAREI would request the
services of an attorney to communicate with the Attorney General's office.
Upon such requests being accepted, the said attorney would ask for a
temporary restraining order against the language regarding "liability
insurance". We are continuing to receive feedback from our members and
will proceed accordingly.

We will be hosting a Roundtable Discussion at the 2007 Summer Conference.
The topic will be "Changes in Insurance Coverage for Inspectors". If you
have any concerns or questions, please attend! If you do not plan to attend
the conference but would like to attend the Roundtable Discussion, please
email me at andrea@tarei.com.

Please understand that this amendment blindsided all parties, including
TAREI and TREC. It was presented at the 11th hour and TAREI did everything
to let our members know so that they may react appropriately. To clarify
any rumors that may be circulating, our current lobbyist, Bill Siebert, did
a tremendous job of letting us know what was going on at the Capital. It
was our previous lobbyist who brought the amendment to Representative McCall who then brought it to Senator Shapleigh's office.

If you have any questions regarding this update, please email
andrea@tarei.com and I will forward to the Board of Directors.

Regards,

Andrea Barnard

So what these arrogant crooks at TREC take it upon themselves to do is require any Inspector who's license renews before the effect of the law; to have the Insurance in effect before the law is in effect.

I could see saying, "renew in July and have the insurance in effect by Sept 1." That is reasonable. What they are doing is not. What a bunch of arrogant jackasses.

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

Got the same email and thought the same thing...

Jackazzes.

Rich

__________________
"If con is the opposite of pro, is Congress the opposite of progress?"
Richard Rushing, HCRI
Duncanville, Tx.

It is obvious someone here is not seeing the grand plan or the silver lining that comes attached to all home inspector licensing issues. Sarcasm = off!

I'm so confused where are the "licensing solves everything" cheer leaders?

For those who cannot read or just refuse to read...

The issue in Texas is not a licensing issue. It is an issue where we have a system in place that has been working and continues to work today. Now, along comes an ethically challenged state senator, who is working on the behalf of the insurance companies interest and introduces legislature that was hid til the 11th hour from all possible opposing views-- then ram-rods said legislature through, basically unchallenged until it was on the governor's desk (now).

Texas licensing is not the issue. It's E&O that's being mandated by those with an interest in the future sales of the "new" insurance requirement.

Richard

__________________
"If con is the opposite of pro, is Congress the opposite of progress?"
Richard Rushing, HCRI
Duncanville, Tx.

Irregardless of what kind of rates TAREI is able to
"negotiate", there will be an increased cost of doing business for Texas HIs.
When will everyone begin raising their rates?
Also, has anyone began publicizing this to real estate agents, local papers, etc.

Anyone followed through with applying a little pressure to the
"politicians" that slid this through?

Lots of questions for sure, but I want to make sure I am applying my time correctly in how I intend to follow through with this.

If it was me, I would go ahead and get my E&O coverage if I did not already have it. It can take a little time to get it approved.

TAREI is not going to be able to get that big of a reduction, maybe a 10% reduction if that. Shop around. ALLEN, BRP (Business Risk Partners) are good choices. They will also insure multi-inspector firms. If you are a member of ASHI, NAHI or NACHI they have already secured programs for their members.

Expect to pay between $2,500 to $4,000 depending on who and what you are looking for and your experience record. If it was me I would go for the highest deductible that you can afford. A policy with a $2500 or $5000 deductible will save you a good deal of money. This also allows you to settle a claim without involving your insurance and the possibility of a cancellation with too many claims.

I do not anticipate having a claim, but I have the coverage just in case. Out of the 4500+ inspections I have done I have never had a claim on my E&O. I have taken care of my screw-ups myself. I have bought a dishwasher, a water heater, I have had a few service calls from an electrician, and I have even bought a french door. All of these were under $1000 and I took care of them myself. The door went on for a few months and I think it ended up costing me around $1500 with my attorneys fees.

__________________
Scott Patterson
Spring Hill, TN
http://www.traceinspections.com

Nowhere on the TREC website does it mention yet of requiring E&O to renew your HI license.

__________________
Rick Hurst
Home Works Inspection Co.
5 out of 4 people have trouble with fractions

Scott,
My insurance carrier requires that I let them know the first thing when I am contacted about a potential lawsuit, Granted, I may head off a complaint by taking care of something before it gets to that point, but once the summons, or even a letter from an atty. show up, I'm required to contact my carrier.

I think a majority of complaints that may end up in court could have been taken care of for less that $5000.
JF

The Governor has until midnight tonight to sign or veto. If he does neither, as you know, it becomes law. I would suspect you will know TREC's directions soon.

The portion of the Bill pertaining to us, as amended, is attached. The effective date is Sept 1. The ins requirement is unrelated to your renewal date.

John Smith,
Yes, I am proceeding with efforts to get someone, anyone interested in the bigger picture of this story. Frankly, at this early date, no interest has been expressed. Unfortunately, I think the days of investigative journalism are dead and gone.

Attached Images

Effective date.pdf (43.5 KB, 7 views)

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

Not wanting to start an argument here, but the requirement of Ins. is only required when renewing your license according to the wording of the statute. I am sure there may be additional requirements imposed by the bureaucracy at TREC, but for now, I would have to think this would be a requirement phased in over a two year period. My license is not up for renewal until Oct. 2008, so I will have a year longer to comply, IF my GUESS is correct.

__________________
Jim Luttrall
Mr. Inspector.net, Inc.
Allen, Texas 75002

A point of clarification.

I not a lawyer and don't even want to play one of the SB's on television. My opinion of the effective date of the requirement for insurance comes as the result of talking to one of the State Reps.

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

Somebody mentioned this earlier - What if every inspector temporarily retired as of 9/1/07? I know - there would be many that would not go along - but, maybe. Consumers would be pissed - thats where the pressure would have to come from to change the law.....

Troublemaker

Has anyone called TREC and asked the folks what is going on? From what I have seen it looks like all of this is hearsay and everyone is second guessing everything.

__________________
Scott Patterson
Spring Hill, TN
http://www.traceinspections.com

Scott,
Good idea, but this is TREC. That team of scoundrels has never answered a question directly and concisely when it is already codified, much less before it is. If I had bothered to save any of the answers to questions I have asked, I would post them. But, seeing as how they were meaningless dodges, I didn't save them.

We should all know as soon as the AG clarifies for them just how far they can shove it. It really won't matter for me for very long anyway. I'll do what I have to for maybe one more year, then focus on specialty areas they don't control.

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

Found this on NACHI. Im curious why TAREI doesnt have anything in the public area about this deal. Im a member of neither, was thinking of joining NACHI, but now am starting to lean towards another organization.

Call me a little slow, but I cant tell if he actually signed it or not.



Message - June 15, 2007

The purpose of SB 914 is to continue and improve the functions of the Texas Real Estate Commission. A provision in the bill requires all real estate inspectors to purchase liability insurance. This mandate is a financial burden on small and independent inspectors who will be out of pocket more than $1,300 a year and will most certainly pass the cost onto consumers. The legislature did not properly consider the effects this will have on the market, and how it will make the American Dream more expensive. At the same, I couldn't justify the elimination of a vital regulatory agency despite this onerous clause.

I encourage the Legislature to rethink this requirement and address this problem in 2009.

IN TESTIMONY WHEREOF, I have signed my name officially and caused the Seal of the State to be affixed hereto at Austin, this 15th day of June, 2007.

RICK PERRY
Governor of Texas

ATTESTED BY:
ROGER WILLIAMS
Secretary of State

Texas Governor Rick Perry - Message - June 15, 2007

On the TX legislature bill tracking site it says it will become active 9/1 without the Gov's signature. If the governor does not veto, the bill becomes law. I am pretty sure that's what happened here. He did not like the provision but felt he could not veto the whole bill and had no option for a line item veto.

Clever work by the jerk that slipped it in. I live in Plano and can't wait until he comes up for re-election so I can support whoever is his opponent.

I think there is still a long shot chance that the Attorney General’s office will determine that this is a general liability insurance requirement and not one for professional liability insurance. TREC has asked the AG for a determination about that and should get one back before September 1st.

Keep in mind that this bill came about as a result of the Sunset Commission’s review of TREC. One of the things that the Sunset Commission likes to do is create as much uniformity between the various state agencies as possible. That makes their work easier as they review all state agencies over their 12-15 year cycle.

There are many state issued licenses that require general liability insurance but no others that I know of that require professional liability insurance (E&O). I hold two other state licensed beside my inspector license and both of those have a general liability insurance requirement but no E&O requirement.

As those of you following the bill know, the wording is vague about the kind of insurance being required. I think this may have been intentional. Vague wording would serve to create some confusion when the amendment is first discovered and it did indeed do that. It also continues to serve in that capacity even now.

This kind of vagary also leaves the politician some wiggle room if it really hits the fan about E&O and would allow a plausible "Now wait a just a minute! I meant general liability all along".

Think about it and imagine how accepting we would all be at this point if it turned out to be just a general liability requirement. And how relieved we would all be that we dodged an E&O bullet. The fervor of complaint would all but vanish at that point after a collective sigh of relief.

I personally am not holding my breath for this kind of outcome but I think its still within the realm of a distant possibility.