TREC inspector insurance may change

TREC staff is trying to prevent the cost of defense from being included in the $100,000 insurance requirement. They say it is required by statute however it is staff who interprets the specifics of the statute. One idea is to require more insurance (300K for example). The inspector committee will discuss this again in early January 2018. The Commissioners will evaluate it again in February 2018.

The November 2017 TREC meeting video was edited to show this topic. It is at this link.

I’ll send a survey on these questions. Feel free to provide input. Many more questions coming.

John Cahill
Circulate freely

  1. The inspector (you) will pay for anything missed up to $100,000 in exchange for a $300 dollar fee and a 4-hour inspection using the TREC Standards as a requirement document? (numbers approximate).

  2. What would you charge to offer a $100,000 Standards of Practice guarantee? Post edit. Someone asked for clarification on this. What would you charge if page 1 of the inspection report said, “The home inspector is required by Texas law to be financially responsible for any error or omission regarding the TREC Standards of Practice? The intent of statute prevents the inspector from reducing their liability to less than $100,000. The public has the right to file a complaint against an inspector at TREC and to also pursue financial damage relief through the inspector’s mandatory professional insurance policy.”

  3. How much do the real estate agents make on a $300,000 sale? Not to criticise agents but is compensation fair for inspectors regarding risk and reward?

  4. How long would your guarantee be in place? 1, 2, 4 or more years?

  5. How long would your inspection take?

  6. Do agents and sellers start getting impatient if the inspection is longer than 6 hours?

  7. Who decides your innocence or error? The insurance company, TREC, the civil justice system or a combination thereof?

I remember TREC fining an inspector for performing a negligent and incompetent inspection on a roof that didn’t even exist at the time he inspected the house. TREC has an inherent conflict of interest in adjudicating such matters, considering TREC’s revenue comes from the very fees and fines that it levies against licensees.