Q&A with Bill Cassetty: How does requiring insurance change Oklahoma home building?

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Published: November 3, 2009

How does requiring insurance change Oklahoma home building?

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Q: A state law is now in effect requiring counties, cities and towns that issue building permits to get proof that the applicant has workers compensation and general liability insurance. What is the benefit to home buyers?

A: Several contractors are not licensed under the (state) Construction Industries Board. Any legitimate contractor will have this insurance. Homebuyers and those having work done on their property can rest easier knowing their contractor is legitimate. But, just because a contractor has insurance doesn’t make them the best. A consumer still needs to do their homework. Get references and check them. How long have they been in the business? An important indicator of their veracity is membership in a trade association such as the Central Oklahoma Home Builders Association, Home Builders Association of Greater Tulsa or one of the other 11 home builder associations throughout the state.

Q: What is the benefit to home builders?

A: Everyone is now on a level playing field. Before, the association members were at a small disadvantage due to the other guy not having insurance and thus his overhead was lower. We felt our advantage was our professionalism and the education we offer. If the buyer was only interested in price, we lost.

Q: Who will make sure that cities, counties and towns actually make sure permit applicants are insured? How?

A: The Oklahoma Municipal League and the communities are putting a plan in place. Since cities are autonomous, enforcement will take different paths. We already know some cities will require registration — Del City and Norman, for example — while other cities will require proof each time you apply for a permit, such as Edmond.

Q: What about areas in the state where building permits are not required? Why didn’t the Oklahoma State Home Builders Association push for a requirement that all builders carry insurance whether or not a permit is required?

A: There is no way to enforce it without licensing, which we did push for legislatively a few years ago and no doubt will again. Currently, enforcement fits best at the permit level.

Q: Will this stop "fly-by-night” contractors?

A: No, there will still be some who will get their permit and then drop their insurance, similar to what happens with car tags. But it is a step in the right direction. Also, there are still many areas where building permits are not required or some work doesn’t require a building permit. It will still be vital for the consumer to do their homework.

RICHARD MIZE, REAL ESTATE EDITOR