Kickbacks for insurance agents?

As many Florida inspectors now know, a recent Declaratory Statement in Florida by G.W. Harrell of The Division of Professions (DBPR) allows licensed home inspectors to give kickbacks to insurance agents for referrals for insurance related inspections. The Florida Home Inspector Licensing Law specifically prohibits, kickbacks, inducements, or rewards to agents or brokers for the referrals of home inspections. (FS 468.8319). However, since the statute does not specifically address insurance agents or insurance brokers, Mr. Harrell carefully crafted a Declaratory Statement condoning kickbacks or “referral fees” as he calls it in response to a Declaratory Petition submitted by well known insurance industry lobbyist on behalf of a large inspection firm specializing in insurance related inspections. This ruling appears to clear the way for large inspection firms to buy market share for insurance related inspections. I have spoken with FABI (Florida Association of Building Inspectors) and they have stated that their code of ethics prohibits this practice. So- my questions are as follows:

Does NACHI’s Code of Ethics currently allow this practice?

Would NACHI leadership like to go on record with a position statement regarding this recent Declaratory Statement from Division of Professions?

If NACHI’s Code of Ethics prohibits this unethical practice, will NACHI be enforcing this ethics violation if members are found to be giving kickbacks to insurance agents for insurance related inspection referrals?

NACHI’s code of ethics does not prohibit inspectors from paying or receiving kickbacks from anyone other than real estate agents.

Interesting. Help me to understand the logic and/or though process behind the ethics provision relating to kickbacks or the more sanitized term- “referral fees”.

It would seem to me that home inspectors do home inspections and are prohibited from giving kickbacks to realtors for referrals for inspections due to the potential for a conflict- I get it.

It also seems to me that home inspectors do insurance related inspections. It also seems to me that these insurance related inspections are inspections on homes. If home inspectors are prohibited from giving kickbacks to real estate agents for referrals for inspections, why are they NOT prohibited from giving kickbacks to insurance agents for referrals for inspections? I don’t get it. Please help me to understand the logic of this.

You are wasting your time waiting for a logical explanation Steve! :wink: :wink:

Somehow, an insurance inspection on a home isn’t a home inspections even though it is performed on a home.

There is no logic. It is what it is.

Whether he is receiving it or paying it … a member of NACHI can engage in any kickback system as long as he is not paying or being paid by a real estate salesman.

I feel it is all designed to drive the single owner-operator of a home inspection practice out of business.

I agree with Steve on this. Nachi should def adjust the standards and forbid all kickbacks involving inspections of all types.

Any kickbacks are wrong, IMHO.

This is very wrong and should be addressed at the state level, as well as this organizational level. There has to be a rhyme or reason to it.

Hopefully the right thing will happen…

So the lonely home inspector will be denied the chance to curry favor while everyone else is allowed to. Doesn’t seem right to me.

I think we should prohibit it, but it won’t change a thing. The multi-inspection firm who initiated this Declaratory Statement isn’t even going to be using licensed home inspectors to do these inspections and isn’t required to by law. In the eyes of the law in FL, home inspection regulations don’t apply to this practice as these aren’t home inspections.

Still I bet some employees of said firm are members here as many joined to get grandfathered. This would be a step in the right direction and send the right message to the industry. The practice should be banned by nachi.

Professional standards not yet set, should begin here…

Why Hamper Nachi inspectors…make it illegal at the state level not the association level. That is just dumb.

I totally agree. NACHI and Professional Inspectors should take the lead on this issue. FABI has already come out against the practice. Also, it is time for NACHI to take a stand. If NACHI prohibits the practice of kickbacks for it’s members, any member working for DMI or offering kickbacks should be expelled from NACHI. All NACHI logos on the offending member’s websites and marketing materials should be forced to be removed (I for one- do not wish to be associated with anyone condoning kickbacks) The long term goal being to starve the WCE’s of their professional labor pool in an effort the lower their quality, increase the QC issues, and be able to show the public- as well as the insurance industry the difference between them and professional inspectors who abide by professional standards and ethics provisions. This concept would also help us (Professional inspectors ans Associations) in gaining support at the state level to force them to make the moral and ethical changes needed to prohibit kickbacks of any kind for any type of inspection.

Mr. Hession, while this may “hamper” some NACHI members in the short term, I believe it will ultimately benefit NACHI members and our profession over the long term.

NACHI has taken a stand.

The code of ethics was revised to allow inspectors to accept kickbacks from various contractors and conceal them from their clients. How can it be considered unethical for inspectors to receive kickbacks and not pay them?

What am I missing from NACHI’s COE below?

The InterNACHI member shall not:

have any disclosed or undisclosed conflict of interest with the client;
accept or offer any disclosed or undisclosed commissions, rebates, profits, or other benefit from real estate agents, brokers, or any third parties having financial interest in the sale of the property; or
offer or provide any disclosed or undisclosed financial compensation directly or indirectly to any real estate agent, real estate broker, or real estate company for referrals or for inclusion on lists of preferred and/or affiliated inspectors or inspection companies.

From International Code of Ethics for Home Inspectors - InterNACHI

Please clarify your statement above so that I can gain a better understanding.

You accurately quoted from the COE.

It has been established by NACHI management that paying or receiving kickbacks is not a “conflict of interest” unless the kickback is being paid or received from a real estate salesman or, in very specific and limited cases, a building contractor who will be performing work on a reported defect. Members are allowed … and encouraged … to accept kickbacks from all other contractors.

Kickback schemes are, according to NACHI management, not only “ethical” but have been promoted as being a good way for an inspector to build his business.

Rather than limiting Nachi members from receiving kickbacks for insurance inspections, the best way to limit this practice is to make it very public through the media. Once the consumer understands that he will be paying extra for a wind mit just to cover the kickback, there will be an outcry for the practice to stop.

It appears that DMI has already raised it’s prices about $25 that will most likely go to the insurance agent. At $150 a pop, they can afford that kickback cost since the actual inspector is only getting about $50-$60. The other large firms will probably follow suit. Us “lonely” inspectors are already too low on pricing, and can not play this game without losing our shirts.

Once the public knows about this, the insurance agents will not want to participate, or risk losing the client IMHO.

Ever heard the term “nice guys finish last” I suspect licensed home inspectors are irrelevant to the WCE’s. As was proven during the reinspection program.

Haven’t we learned anything. even the playing field. Make it illegal at the state level also I’m guessing it’s not illegal for the inspector to offer repairs during a 4 point either. Chew on that concept for a while.

We better get our heads out of the sand and fast.

You can call me Tom as long as I can call you Steve, Mr. Taylor.:roll:

It is illegal for a “home inspector” to offer repairs for a 4pt deficiency. Think about it…