Contractors say lawsuits propel home prices
SACRAMENTO BEE — "New-home construction costs in California could go through the roof, say specialty contractors, if something isn't done to curb construction-defect lawsuits. They blame lawsuits for their escalating costs on general liability insurance. Some specialty contractors, who are the plumbers, roofers and others hired to build new houses, say their premiums have increased 300 percent to 500 percent in the past three years. They say increases wind up being passed to home buyers, adding tens of thousands of dollars to a new home's price. "


This is a familiar refrain from developers and construction contractors. It misses the point, which is, who should bear the financial risk of loss from latent (i.e., not apparent to the eye) defects in original construction? The candidates are: the building professionals who made all the mistakes in the first place; their liability insurance carriers; the buyers, who didn't know and had no way of knowing that the defects were there, and who weren't even around when the mistakes were being made; the buyers first party property insurance carriers.

OK, time's up. Answer, if I ran the world: the carriers for all the building professionals (developer, general contractor, subcontractors) who screwed up put together the money to pay the owners and/or their HOA. Then the carriers pursue their coverage issues and if they win, the insured construction professionals have to pay back their carriers. But it isn't fair to make the owners wait while complex coverage issues are litigated or arbitrated between the wrongdoers and their carriers.