Thread: Pay Per Inspection Insurance?

Has anyone used (or thought about using and didn't) the "pay per inspection" insurance offered by Allen Insurance? Seems like it might be a good way to start out. Any opinions? One downfall I see is that it only covers claims made while you have the insurance. Anyone?

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That may be worth it if you only did 1-5 inspections a year.

If that is so, you need to find another occupation. Anyone in this biz that is working at it would need coverage for everyday.

rick

Pay as you go insurance is not the way to go. It will cost you 10X's more in the long run and if you are in a state that requires E&O it will not be accepted.

Look at BRP and Allen, I think they offer payment plans to help defer the initial cost. FREIA offers one as well, but I believe it will cost more.

State Farm also offers E&O, but you would have to check with your agent to see if they write in your state.

Local agents will have to go to State Farm corporate/regional office to get the quote out to you.

Do most people get the claims made insruance? or Occurance insurance policys?

Originally Posted by Jonathan Clevenger

Do most people get the claims made insruance? or Occurance insurance policys?

Most inspectors purchase the "cheapest" plan available, ironically.

Your mileage may vary...

I checked with State Farm recently. They do not insure new businesses. A business must be in existence for two years before they will talk to you at all.

Originally Posted by Daniel Mosier

I checked with State Farm recently. They do not insure new businesses. A business must be in existence for two years before they will talk to you at all.

Try looking at the ones listed on this site. InspectionNews has most of them listed.
http://www.inspectionnews.net/home-i...nspectors.html

It's quite a shock for most people, I think, when they realize that they will still be carrying insurance 3 to 5 years after they leave the business.

Originally Posted by Michael Thomas

It's quite a shock for most people, I think, when they realize that they will still be carrying insurance 3 to 5 years after they leave the business.

Not me.... When I close the doors the doors will be closed. It will take a Tibetan Monk with a crystal ball and a trained flying monkey to find me!

I think the big shock comes when a person gets out of AHIT or whatever training they get to obtain a license in a state that requires E&O and the school never brought that subject up in class!

I recently graduated from AHIT. The instructor stated we would have to get general and professional liability insurance, why both were needed, and explained the basics of each. He did not know the minimums of each for Tennessee but told us where to find the info on the internet.

I pay about $6000/year for per inspection insurance. Both liability and E&O with no deductible. It's about $18 per inspection. It's through the Minnesota Joint Underwriters Association and I think it's only available to inspectors in MN, but I'm not sure.

I pay my premium in advance by estimating the number of inspections I'll do the following year. At the end of the year I'm audited. If I come up short the extra money is used for the next years premium. If I did more inspections than I paid for I have to pay for them.

Key words here are "No Deductible".

Originally Posted by Daniel Mosier

I recently graduated from AHIT. The instructor stated we would have to get general and professional liability insurance, why both were needed, and explained the basics of each. He did not know the minimums of each for Tennessee but told us where to find the info on the internet.

Where did you take the AHIT course?

Most of the course was online. However, Tennesse law requires 24 hours to be in-class instruction. That was completed at UT Nashville. AHIT offers the in-class portion twice a year in Nashville, and at other locations during the rest of the year.

Originally Posted by Ken Rowe

I pay about $6000/year for per inspection insurance. Both liability and E&O with no deductible. It's about $18 per inspection. It's through the Minnesota Joint Underwriters Association and I think it's only available to inspectors in MN, but I'm not sure.

I pay my premium in advance by estimating the number of inspections I'll do the following year. At the end of the year I'm audited. If I come up short the extra money is used for the next years premium. If I did more inspections than I paid for I have to pay for them.

Key words here are "No Deductible".

Ken, you are overpaying by $3,000+-!

Yes the Zero deductible is unique but you could be paying around $2,100 for E&O with a $2,500 deductible that also includes GL. The savings would more than pay for that deductible...

Originally Posted by Jonathan Clevenger

Do most people get the claims made insruance? or Occurance insurance policys?

Most insurance companies only offer claims-made policies. I believe Allen Insurance offers an occurrence policy; however, if you intend on being in the business for 5+ years, you will save money in the long run by purchasing a claims-made policy.

Occurrence policies are great. They normally give you 4 years after your policy expires in which if you report a claim, it can still be covered. The down side is, it averages twice the cost of a claims-made policy.

Originally Posted by Scott Patterson

Ken, you are overpaying by $3,000+-!

Yes the Zero deductible is unique but you could be paying around $2,100 for E&O with a $2,500 deductible that also includes GL. The savings would more than pay for that deductible...

As somebody mentioned earlier, most inspectors obtain the cheapest insurance available. I'm not one of those guys. I want the best protection for me and my family.

One claim a year with a $2,500 deductible puts the payout about equal to what I pay. Two claims and you're paying more. When working for a national company I'd go a few years without a claim. But when they did come there wouldn't be one, there would be three. All small stuff, but what happens when I miss a problem with a couple patio doors at $7,000 each, or a $15,000 roof?

You can go with cheap coverage or you can go with good coverage, but you can't have both.

Originally Posted by Ken Rowe

As somebody mentioned earlier, most inspectors obtain the cheapest insurance available. I'm not one of those guys. I want the best protection for me and my family.

One claim a year with a $2,500 deductible puts the payout about equal to what I pay. Two claims and you're paying more. When working for a national company I'd go a few years without a claim. But when they did come there wouldn't be one, there would be three. All small stuff, but what happens when I miss a problem with a couple patio doors at $7,000 each, or a $15,000 roof?

You can go with cheap coverage or you can go with good coverage, but you can't have both.

Hey, if you are having more than one claim a year you might want to be considering a different profession!

Seriously, if you are happy with what you have then that is all that matters.

It never hurts to shop around, Niccole (above post) has helped me over the years. She placed my coverage with a company that covers my expert work, new construction, radon testing, and so much more for the cost of just E&O for home inspections with most insurers. She is a broker and can shop several companies for the best coverage, CSRisk is not tied to just one insurer.

Originally Posted by Scott Patterson

Hey, if you are having more than one claim a year you might want to be considering a different profession!

Seriously, if you are happy with what you have then that is all that matters.

It never hurts to shop around, Niccole (above post) has helped me over the years. She placed my coverage with a company that covers my expert work, new construction, radon testing, and so much more for the cost of just E&O for home inspections with most insurers. She is a broker and can shop several companies for the best coverage, CSRisk is not tied to just one insurer.

I'm only human Scott and humans make mistakes and some claims are just beyond our control. Yes, I've had claims before, been sued and lost only to win on appeal. I'm talking claims being anything from a client being not 100% satisfied with my performance so I refund their inspection fee to mold being found behind the kitchen cabinets when they were removed for remodeling. When an inspector does as many inspections as I do there are bound to be claims. While I haven't had any in the past two years, the streak will not go on forever. When it happens (not if it happens) I want to be protected. Keep in mind I'm in a state with no licensing or insurance requirements. I'm not some fly-by-night inspector who only meets the minimum requirements and goes with an inferior product just to say I have it.

By the way, I did shop around. Talked to several brokers who checked at least 20 different companies. Nobody offered the coverage I wanted with $0 deductible. If you or anyone else here knows of any other company offering a per occurrence policy of $300,000 per occurrence, $1,000,000 aggregate with $0 deductible for both GL and E&O covering any activity my company (not just me) perform (ie. inspections, radon testing, thermal imaging, moisture intrusion testing, air quality or mold testing) please let me know.

$0 deductible? Man, I miss things occasionally but out of pocket drips and drabs don't equal the difference you pay.
But I have another question. I have State Farm for E&O. I'm not totally happy with them. I got a flyer from GREIA (General Real Estate Insectors of America). Does anyone have experience with this company? They are offering E&O plus liability for less than I'm paying State Farm for just E&O.
JLMathis

If your new to inspecting and operating on a shoestring budget you have no choice but to purchase the cheapest insurance you can find. After a few inspections you have the option of updating insurance coverage to something that provides better protection.

After being with Allen for 9 years due to Washington State's old requirement for a per occurrence policy because of performing WDO inspections, I read a post earlier that had a link to greia.com > Home Inspector Insurance E&O Errors and Omissions..... Not only did I cut my premium by half, but I gained another $200K in coverage !!! My total premium this upcoming year will be less than $2500 including tax !!!

Give Sarah a call, sure glad I did. And whoever first posted the link - THANKS !!!


Sarah LaRocca
GREI Membership Representative
404-729-4410
Fax 678-765-2304

Pay-Per-Inspection insurance is conceptually great. But make sure you know what you're getting into. Make sure that you will be able to get prior acts coverage from a different carrier should you decide to switch.

That is the first I've heard of the insurance program in Minnesota probably because it is limited to that state. But there is nobody out there offering a ZERO deductible these days except for them apparently.

Originally Posted by Ben Garrison

Pay-Per-Inspection insurance is conceptually great. But make sure you know what you're getting into. Make sure that you will be able to get prior acts coverage from a different carrier should you decide to switch.

That is the first I've heard of the insurance program in Minnesota probably because it is limited to that state. But there is nobody out there offering a ZERO deductible these days except for them apparently.

Just as an FYI - Lexington is now offering a $0 deductible.

Originally Posted by Jim Hintz

After being with Allen for 9 years due to Washington State's old requirement for a per occurrence policy because of performing WDO inspections, I read a post earlier that had a link to greia.com > Home Inspector Insurance E&O Errors and Omissions..... Not only did I cut my premium by half, but I gained another $200K in coverage !!! My total premium this upcoming year will be less than $2500 including tax !!!

Give Sarah a call, sure glad I did. And whoever first posted the link - THANKS !!!


Sarah LaRocca
GREI Membership Representative
404-729-4410
Fax 678-765-2304

Jim,

Do you still perform WDO/WDI inspections/licensed as a pest inspector through the WSDA?

If so, do you have a surety bond along with WDO/WDI coverage through GREIA? Just curious...

I agree with the others that getting per-inspection coverage is not really cost effective, and with the idea that if you're only doing a small handful of inspection jobs per year, you need to be doing something else as well.

The best thing to do (what I would do LOL) is to first get a solid feel for what kind of E&O insurance is available locally to you. You can do most of your top-level shopping online in one shot using a free business insurance quote aggregator like netQuotes or the like (just do a google search).

This should give you a comparison chart with all the majors like Farmers, Nationwide, Travelers, Allstate etc, as well as local agents. You can use those quotes to give you a good idea of rates and coverage in your area, and to bargain with for better rates from the local agents LOL - hey Mr. Allstate, the guy over at Farmers will give me X more coverage for what you're charging...

Mike

If you're insuring your house, boat, car, etc., etc., I'd stick with Nationwide, Farmer's, USAA, and/or State Farm. When it comes to E&O for home inspection, I would go with a carrier/provider who specializes in this arena as it's a completely different animal than personal lines.

You will find a broad spectrum of pricing among the various providers and if price is the ONLY concern, get yourself a high deductible and go with the cheapest policy you can find. You just better hope that doesn't backfire on you....

Update: I decided against signing on with GREI due to them only offering a claims made policy and having to obtain a bond for the WDO Inspection coverage. Didn't like all the info required to secure a bond and the biggest factor is that, if a claim is made against your bond, you pay that back - all of it.
Chatted with Inspector Pro / RESPA a bit too, they had the WDO part covered even with a claims made policy, but their policy wording is tricky and you give up many rights as a policy holder. Granted it would have saved me just a bit over $1,000 per year, but, I've been with Allen on a Per Occurrence Policy for 9 years and I have had no problems - ever. So I'm just going to suck it up and bite the bullet again and stay with Allen.