Builder requires 2 million coverage

Hi all,

First post here.
Megatel (builder) has an inflated amount of insurance coverage requiring 2 million to inspect their new homes. I haven’t found this with any other builders in Texas. I know I can just turn the jobs down, and I do, but this seems a deliberate attempt to keep inspectors away from inspecting this builder as Texas mandates the minimum insurance requirements. Just curious what others think? Is this legal? The home is not even valued close to 2 million.

They own it, they set the rules.
I carry 3M.
Freaks them out when they think they have the upper hand, and I whip out a copy of my 3M coverage!!
Granted, I have it because I do a lot of Commercial properties, but he doesn’t need to know that.
BTW… If you have a lot of these potential jobs, just get it. It’s not that much more expensive than what your state requires (if it does).


Yes, they can set up whatever $$ amount they want.

You think that gaggle of workers pouring out of the van in the morning each has $2 million coverage?


They may be wanting $2M in liability coverage. Creating a $2M liability incident is not that hard, if a personal injury is involved. Let’s say you left a hatch open…


Just do a 1 year warranty inspection after they buy it and write hard. :man_shrugging:

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Talk to your insurance provider, probably not much cost difference.

I agree, the additional cost is minimal. Better coverage to make some money sounds like a no brainer to me.

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Toll bros pull this one all the time.

Megatel is notorious for this, they keep upping the requirements to allow inspectors in. And for good reason, they dont want us there, I have found several big expensive mistakes in their homes. We have gotten to the point where if a customer wants us to inspect a home by them its $200 extra for the headache

It is done on purpose to discourage inspections pre-sale. I tell people to call me at the 11 month interval. All new homes in Maryland have a one year warranty. At 11 months everything has been run and the client has probably found a few things. Time to get it all documented and repaired. Last one I did had a Square D panel recall, loose toilet in the hall bath (which they had never used) and a few other small things.