Editorial: Builders can solve their own problem

Wednesday, Sept. 11, 2002 | 9:02 a.m.

The Nevada Insurance Division acted appropriately last week in rejecting an opinion by home builders that construction-defect insurance should be available through state government. The builders had asked the state to set up an insurance fund and appoint a board of directors to run it. In theory, the state's money would be safe, as premiums charged to the builders would cover the state's investment. Builders argued that reasonably priced construction-defect insurance would then be guaranteed. As it stands, builders argued, it's almost impossible anymore to buy private insurance in this state because so many home buyers are filing construction-defect lawsuits.

With a budget deficit estimated to exceed $330 million next year, and with programs for needy people being slashed, the state is in no position to subsidize the construction industry with a nonprofit insurance fund. The insurance division instead agreed to help provide information about where private residential construction insurance may be obtained. The state also had some advice for the builders: Do a better job of policing those in your industry who are not meeting professional standards. There are without a doubt home buyers who file unwarranted lawsuits. But the majority of homeowners simply want to settle into their new house and get on with their lives. And if there is a problem, they want the builder to be responsive. Better-built homes and better customer service will do more for the construction industry than any state subsidy.