When you hear the phrase, “I want to live the American dream,” and you ask what that means, many people say that they want to own their own home where they can raise their family. Unfortunately, the dream is becoming more difficult to achieve in California because of the current challenges we face in dealing with construction defect claims, lawsuits, and the construction dispute resolution process.
Although the California Legislature continues to deal with issues in workers’ compensation, energy, and the budget, it must now deal with one of the less publicly visible but equally challenging issues – insurance for construction defects.
If California builders, sub-contractors and laborers cannot get insurance, homes cannot be built, and the American dream cannot be realized. This may sound overly dramatic, but the issue is real. Consider this:
·California has seven out of 10 of the highest priced housing communities in the nation;
·The median housing price in California has reached nearly $323,000, well out of the price range for a large number of families;
·Fire fighters and teachers in some parts of the state cannot live in their own communities because of housing prices, and they have to commute up to three hours away from where they live.
The Root of the Problem
So, what is driving the current construction defect insurance crisis, and why is it so difficult for builders and sub-contractors to find insurance at any price? I’ll use the California workers’ compensation crisis to help explain why construction defect insurance is unaffordable.
Editor’s Note: To see the full story, see the June 23 issue of Insurance Journal West. Dan Dunmoyer (email@example.com) serves as president of the Personal Insurance Federation of California.
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