(Inman News Features) - The unavailability and high cost of insurance is becoming a crisis for the California home-building industry, according to the California Building Industry Association. Mick Pattinson, head of the group and president of San Diego-based Barratt American, told state lawmakers at a legislative hearing that only a handful of insurance companies are selling liability policies to builders and contractors.

He said premiums have risen 30-100 percent and in some cases even more in the past year.

"The insurance market for the home-building industry is a disaster and without urgent government action, it will get worse," Pattinson said.

Insurance companies across the United States have faced mounting claims and lower incomes from their stock and bond investments, resulting in elimination of less-profitable business lines and higher business premiums, according to Pattinson. The Sept. 11 terrorist attacks have caused more turmoil because insurers are facing claims of as much as $70 billion.

Pattinson said the problem is becoming a crisis for California home builders because the state has the nation's most lenient laws governing construction disputes lawsuits. California is unique in allowing lawsuits to be filed 10 years after a home is built, he said.