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I am confused about your questions.  Are you referring to residential home inspectors or building inspectors who work for a city and inspect construction in progress? These are two different licensed and skilled careers.  I have met cat adjusters who are also residential home inspectors and I am licensed as a home inspector for insurability by TDI, but seldom ever get a call.  Most states don't have such a license, but with a license in Texas I can issue a certificate of insurability (if the house passes) that will prevent denial of coverage by any carrier in Texas so long as the property meets their underwriting guidelines. 

I have never met an adjuster who was also a city building inspector or who quit to be an adjuster, but there probably are some adjusters out there who did move into adjusting hoping to increase their income.

Is this what you are asking about?

Leland- good description. I'd add that a good home inspector would check the foundation for cracking or settling issues. Inspectors could also have a leg up at understanding pre-existing conditions that could be confused with a covered loss. What I found surprising is that many inspectors' insurance policies do not allow them to climb on roofs. Instead, many do inspections of the roof from inside the attic.

For those who don't know, there are two types of home inspectors in Texas. The real estate inspectors are licensed by the real estate commission. They are prohibited from inspecting for termites and other wood destroying insects as the law requres that to be done by a licensed exterminator.  They are trained to inspect electrical, mechanical, plumbing, and framing to the current codes and to list any item that does not comply with current code even if it met the code that was in effect when the house was built.  Most do not make any notations in their reports that those items are in compliance with the original codes, that they are grandfathered and no repairs are needed, leaving the impression on the buyer that repairs need to be made.  I have lost several sales of houses in the historic district due to that exact reason.  I lost two sales in a row on the same house that was inspected by the same inspector. For the second inspection he just copied his previous report and charged for a new inspection even though I had disputed his original claims of problems (that did not exist) in writing to the first buyer and their realtor.

The other type of inspector is licensed by the Texas Dept. of Insurance as a "VIP" inspector. To save time you can search the TDI website and learn more about it.  Because I am an adjuster, I met all of the training and other requirements and received my license with no additional training or testing required. The VIP license specifically REQUIRES that the inspection include wood destroying insects and termites. A promulgated form is used to write the detail report, photos are included, but there is no requirement that we have to report non code compliant items so long as they are safe and met the code when the house was built. Some inspectors might have a problem with this if they have not worked in the construction industry. It is recommended that the inspector request a clue report to know about any prior claims on the house to ensure that they were repaired properly.  When the inspection is completed, the inspector determines if the house meets the criteria needed to certify insurability. If so, he issues a certificate that goes to the carrier who has to issue the policy unless that house itself does not meet their underwriting guidelines.  When the report is completed, the buyer should have as clear, if not clearer understanding of the condition of the house when compared to the real estate inspectors report.

There are two drawbacks to the insurance inspecting job. One is that TDI does not allow enough to be charged for the inspection.  They set the rate at a little over $100 plus milage regardless of the size of the house and whether it has a pier and beam foundation that requires me to inspect from under the house. The other is that the real estate companies, one in particular, want "their inspectors" to do the job and say that it is illegal for an insurance inspector to issue such a report to a prospective buyer.  I had a serious argument with the CEO of one firm who also happened to sit on the TREC board and adamently refused to allow their realtors to refer any buyers to me for inspections.  I sent a copy of the law, my license, etc. and explained but it did not good.  I called TDI and they had heard this before and said they settled the disagreement with TREC but CEO would not budge.  I gave up on trying to do inspections because I needed a large volume to make any money doing it and to pay for e&o insurance. I maintain the license because it might come in handy sometime but I am not currently promoting that business. 

In reference to one of the other comments earlier, I will add that I was offering more services than just the inspection. I had a price structure to scope and estimate a repair or renovation job at the buyers option if they were buying a fixer upper, or if major repairs were needed, and would act as a repair consultant to the buyer once they selected a contractor to do the work.  As the inspector I could not do the inspection and bid the job as a contractor due to conflict of interest.

Rick, you're actually pretty close on the VIP, and please allow me to further illucidate.

The purpose of the Voluntary Inspection Program, VIP, is to certify the insurability of a house. It is the result of some consumer legislation that was passed in Texas in the mid 1980's during the Great Contraction when the insurance industry began to rapidily shrink in terms of the number of insurance companies available to sell Fire and Homeowners policies. It laid pretty much dormant until the Great Mold & Slab Wars. Due to political heat from the constituents the politicians began to panic, then discovered the VIP was already in place to save their delicate nether regions.

I was drafted into the program to be a Certified Residential Property Inspector number 55 in the program in August 2002.

The miracle of VIP is we are dealing with underwriting issues that affect only the condition of the Risk. Moral issues, Redlining Issues, (Yes, I know it's illegal but they do it anyway.), and certain types of prior losses and frequency are NOT factors VIP affects. What VIP does do is, once the house passes the inspection and is in average to better condition a certificate of insurability is issued to the customer along with the worksheets. Here comes the fun part.

"A certificate of insurability creates the presumption your home is insurable. If you have a certificate, an insurance company can't refuse to sell or renew a policy because of your home's condition unless the insurer reinspects it and describes the deficiencies in writing."

WHOA!!! The sun has shined down on us. So, here we go out and certify the insurability of a house. We are not privy to it's prior loss history and we don't care. One water loss, two water losses and a hail loss. Add in a lightning loss and some wind a year later. All this shows up on CLUE, Comprehensive Loss Underwriting Exchange, the agents/underwriters view into the past courtesy of the paid subscription on the Internet. All this loss activity butts up against any carriers underwriting guidelines. The underwriter sitting in her cubicle grabs the rabbits foot, crosses herself, and slams the reject button, UNACCEPTABLE!!!

But, wait kind people. What about this official Dept of Insurance Certificate of Insurability bought and paid for by the customer? (They don't become Insureds until they are accepted by the underwriter.) 'Since the Great State of Texas says this house is insurable and the law says we have to accept it, unless we can find and describe a deficiency, we're on it.' So, what we have is a CLUE fighter. One loss, two losses, four losses, it doesn't matter as long as the losses affected only the condition of the house and the Insured was not a contributor to the losses. With VIP, acceptability of insurability of the Risk is shifted from the control of the carrier to the consumer. Can we get big Amen from the congregation?

As Rick says, VIP is regulated by the TDI and the home inspection boys are regulated by TREC. The home inspection boys can and do charge big bucks while the VIP is limited to about $104.21. The Home Boys are there for hours on end looking for defects to justify their fee while a VIP normally can be done in well under an hour. The Home Boys get their referrals from Realtors. A VIP inspector gets referrals from insurance agents who see the prior losses on CLUE and suggest the customer call a C.R.P.I. as the VIP certificate can get them around the carriers underwriting guidelines.

Again as Rick says, the need for VIP has dropped off precipitiously in the past couple of years and my last one was over a month ago.

Ol' Ghost
 

Thanks for the additional detail.  I had not thought the water and mold problems.  Are you saying that on occassion they will deny coverage based on prior mold or water claims, or do they usually issue coverage in spite of those prior claims because the VIP inspector issued a certificate?  On another note, did you have a problem obtaining E&O to do the inspections.  My policy that covers adjusting and private investigating specifically excludes coverage for residential inspections that are not related to a specific claim being adjusted.

This is general info of interest to adjusters who are residents of the states they work catastrophe claims in like Texas. We were upset when named in lawsuits and requested the vendors or the carriers to defend us by thier lawyers. The carrier did not defend, however my vendor did.

I was thinking joint and several liability apportionment was the target..... my experts say the target was to keep the suits in Galveston and Jefferson County District Courts for all the same old reasons as the Texas resident status would not allow it to be removed to Federal court.. Glad to get this news and I will be out of the woods in 4 years from the date of the filing ( 2 for a tort+2 for a contract). I have said enough, please do not ask any questions.

Please do not chime up with this E & O protection BS. I was not negligent, I did not commit any error or omission/act. I just worked a claim like I was instructed to do. The carriers must proptect us in these type suits. Why don,t we have a hold harmless and indemnity agreement with the CARRIERS, before we WORK their cat. claims. We all must be W-2 employees to have any real protection. How many vendors have W-2 employees. Is it just one or about 1/2 dozen. I know Pilot has W-2 employees and thats the only one I know.If you working adjusters know of any more please list them here.

In reference to the comment about escrow protecting the buyer, it actutally has no effect on insurance coverage. It is not uncommon for a buyer to close on the house then a few weeks later the carrier does an inspection and denies coverage and cancels the policy retroactive to the closing date. If a VIP inspection was done and a certificate issued to the buyer and passed on to the ins. carrier, the carrier is not supposed to cancel the policy after issuing it. 

The property disclosure does not really have any effect on the insurance issue.  Other than disclosing major repairs to the house that may or may not be related to an insurance claim, the only question on the Texas disclosure that mentions or relates to insurance is: Section 8: Have you ever received proceeds for a claim for damage to the property and not used the proceeds to make the repair for which the claim was paid?  There is one other disclosure item that asks if the seller has within the last 4 years received an inspection report from anyone licensed as inspectors or otherwise permitted by law to perform inspections.  If a claim had been made and an adjuster inspected the property this could possibly require answering yes, but I think it really means a full inspection of the house, not just of the portion involved with a claim. 

In other words, for a buyer to be fully informed in Texas of the property condition and know it can be insured is to have a VIP inspection.

Leland, back in the good old days, underwriting departments would have 10% of their property book of business inspected each year so that over a decade, the entire book would be reviewed, as well as every new piece of business added on policy inception. These inspections were farmed out to independent inspection companies. They would then subcontract to their 1099 inspectors at a 50% fee split. The fee has always been extremely cheap on the theory that volume would make it all palatable. This was when gas was cheap, car insurance was cheap or not really mandated, and the general cost of living was not as expensive as it is in this brave new world. I'm talking about the pre-1974 America. Back then a typical front & back photo of the Risk with a diagram and some basic condition information earned the inspector $3.75 less the cost of the two Polaroid photos and the gas to get there. These days, the same report is worth about $12.50, but the Polaroids have been replaced by digital. This is what is popularly known as the 30mph drive-by. As you can see, underwriting inspections are the poor, trailer trash cousins of the claims department. By contrast, we who fight the claims battles for the company are grossly overpaid in comparasion. And, these inspections are done without notifying the Insured. When I was doing them, no one was ever home, it was just me and your dog. One thing, when you do this kind of work, you learn to be very, very quiet in opening the gate to the back yard so the sleeping dog stays asleep the entire time you go to the back of the yard to take the rear Risk photo and then exit the premises and silently close the gate. And you think cats are quiet?

But, that was the good old days. These days the afore mentioned MBA honchos have already chopped away all the corporate fat and muscle, so they are now using cutting torches to remove the bone and sinew. The budget allowances for underwriting inspections now only allow for a fraction of the outside inspection surveys. One carrier, Farmers, wants to have the Insured called to try and determine if a field survey is really needed by inquiring the age of the roof, or the fence, or the paint, or if an uncaged trampoline is in the front yard and the Risk is next door to an elementery school. As such, the wonderful world of underwriting inspections is dwindling into the setting sun.

Demand for the VIP has dropped due to the hangover effects of the Great Mold & Slab Wars wearing off, plus the changes in the policy wording, and the huge decrease in claim volume industry wide.

Ol' Ghost