Alaska Home Inspector Bond: A Comprehensive Guide
December 11th, 2020
This guide provides information for insurance agents to help home inspectors on Alaska Home Inspector Bonds
At a Glance:
- Average Cost: $125 – $500 per year, based on the home inspector’s credit standing
- Bond Amount: $10,000
- Who Needs It: All individuals and businesses that act as home inspectors in the State of Alaska
- Purpose: To ensure the public will receive compensation for any damages should the home inspector fail to comply with home inspector licensing law
- Who Regulates Home Inspectors in Alaska: Alaska Department of Commerce, Community and Economic Development (DOCCED)
Alaska Statutes 08.18.071. requires home inspectors operating in the state to obtain a Home Inspector license with the DOCCED. The Alaska legislature enacted licensing laws and regulations to ensure that home inspectors engage in ethical business practices. In order to provide financial security for the enforcement of the license law, home inspectors must post either a time certificate of deposit, cashier’s check or purchase and maintain home inspector surety bond to be eligible for licensure.
What is the Purpose of the Alaska Home Inspector Bond?
Alaska requires home inspectors to purchase the Home Inspector Bond as part of the application process for the Home Inspector License. The bond ensures that the public will receive compensation for financial harm if the contractor fails to comply with the licensing regulations. In short, the bond is a type of insurance that protects the public if the contractor breaks licensing laws.
How Can an Insurance Agent Obtain an Alaska Home Inspector Surety Bond?
BondExchange makes obtaining an Alaska Home Inspector bond easy. Simply login to your account and use our keyword search to find the “home” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
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Is a Credit Check Required for the Alaska Home Inspector Bond?
Yes, surety companies will run a credit check on the home inspector to determine eligibility and pricing for the Alaska Home Inspector bond.
Home inspectors with excellent credit and work experience can expect to receive the best rates. While home inspectors with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the home inspector’s credit.
How Much Does the Alaska Home Inspector Bond Cost?
The Alaska Home Inspector surety bond can cost anywhere between 1% to 5% of the bond amount per year. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on the $10,000 bond requirement.$10,000 Alaska Home Inspector Bond Cost
|Credit Score*||Bond Cost (1 year)|
*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.
How Does Alaska Define “Home Inspector”?
To paraphrase Alaska Statutes 08.18.171, a home inspector is any person or business entity who performs means of visual examination, in accordance with guidelines, of systems of one or more residences or intended residences.
How Do Home Inspectors Apply for a License in Alaska?
Home Inspectors in Alaska must navigate several steps to secure their home inspection license. Below are the general guidelines, but contractors should refer to the Department of Commerce, Community, and Economic Development’s Home Inspectors page for details on the process.
License Period – The Alaska Home Inspector License expires on June 30 of every even numbered year (2020, 2022, etc) and must be renewed before the expiration date
Step 1 – Determine the License Type
Alaska requires home inspectors to obtain specific licenses corresponding to the nature in which the home inspector’s business operates. Below are the different types of the Alaska Home Inspector License.
- Existing Home – Conducts inspections of previously occupied homes only
- New Home – Inspects new homes only
- Joint – Conducts inspections of both new and existing homes
Step 2 – Complete the Application
In order to obtain a home inspector license the application must be completed, signed, and notarized. The Authorization for Release of Records must be included with the application. The application can be completed online here.
Home Inspectors must complete the application corresponding to their specific license type, including the following steps:
2.a Worker’s Compensation – All Alaska businesses who have employees must purchase worker’s compensation insurance. All home inspectors should submit the Worker’s Compensation Worksheet with their application, and home inspectors who are required to obtain worker’s compensation insurance must submit proof of insurance with their application.
2.b Business Registration – Home inspectors who operate as either a corporation or LLC must register their business with the DOCCED.
Step 3 – Pay Fees
Home inspectors will need to pay the following fees when submitting their applications:
- Nonrefundable Application Fee: $65
- Registration Fee: $235
Step 4 – Pass the Exam
4a. Home inspectors seeking to obtain either a New Home or Joint license will need to pass all four national examinations as listed below:
- Residential Building Inspector
- Residential Electrical Inspector
- Residential Mechanical Inspector
- Residential Plumbing Inspector
Home inspectors seeking to applying for an Existing Homes license can schedule their exam by contacting National Home Inspector Examination Board.
Home inspectors who are applying for a license 3 years after completing the required exam(s) will need to submit proof of completing at least 8 hours of continuing education in the two years leading up to their application
Step 5 – Deposit Cash or Purchase a Surety Bond
Home Inspectors must either deposit cash or purchase and maintain a $10,000 home inspector surety bond. Home inspectors who choose to deposit cash will not have their cash returned until three years after they cease work.
Step 6 – Purchase Workers Compensation Insurance
Alaska Statue 08.18.101. requires all home inspectors in Alaska to obtain worker’s compensation insurance for their employees, owners and corporate officers. Home inspectors who meet certain requirements may apply for an exemption of this rule
Step 7 – Purchase Liability Insurance
Home inspectors will need to purchase and maintain liability insurance with the following minimum limits:
- $20,000 property damage
- $50,000 injury or death to one person
- $100,000 injury or death to more than one person.
Step 8 – Obtain a Business License
All businesses operating in the State of Alaska must obtain a business license with the Alaska Department of Commerce, Community, and Economic Development. Home inspectors can obtain a business license here.
How Do Alaska Home Inspectors Renew Their License?
Home Inspectors can renew their license online through Alaska’s online renewal portal located here.
The Alaska Home Inspector License expires on June 30 of every even numbered year (2020, 2022, etc) and must be renewed before the expiration date. In most cases licenses will be renewed immediately, but due to heavy volumes of renewal applications this may take up to 4-6 weeks.
What Are the Insurance Requirements for the Alaska Home Inspector License?
The State of Alaska requires home inspectors to obtain general liability insurance with minimum limits of 20/50/100. Home Inspectors who have employees will also need to obtain worker’s compensation insurance. In addition, contractors must deposit cash or file a $10,000 home inspector surety bond.
How Do Alaska Home Inspectors File Their Bond With The Alaska DOCCED?
Home inspectors should mail the completed bond form, including the power of attorney, to the following address:
Home Inspectors Program
State Office Building, 333 Willoughby Avenue, 9th Floor
PO Box 110806
Juneau, AK 99811-0806
The home inspector surety bond requires signatures from both the surety company and the contractor. The surety company should include the following information on the bond form:
- Legal name and license type of entity/individual(s) buying the bond
- Surety company’s name, address and phone number
- Bond amount
- Date the bond is signed and goes into effect
How Can Alaska Home Inspectors Avoid Bond Claims?
To avoid claims on the Home Inspector Bond, home inspectors must follow all license regulations in the state, including some of the most important issues below that tend to cause claims:
- Pay all laborers and employees
- Abide by contracts and repair improper or negligent work
- Pay taxes and contributions due to the state and municipalities on time and in full
- Repair all public facilities damaged through the course of the project
- Pay suppliers for all materials and equipment
What Other Insurance Products Can Agents Offer Contractors in Alaska?
Alaska requires home inspectors to obtain general liability insurance. In addition, home inspectors with employees will have to purchase workers’ compensation insurance. Bonds are our only business at BondExchange, so we do not issue any form of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for Alaska Contractor Customers?
Alaska conveniently provides a public database to search for active home inspectors in the state. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.