Article: 3 most common insurance policy pitfalls

[Stephanie Jaynes]

Hi InspectionNews readers!

Recently, we did a free webinar with InterNACHI and with ASHI on understanding your insurance policies. The theme of the hour were common policy pitfalls: the fine print that leads many home inspectors to purchase less coverage than they actually need. This article highlights the top three pitfalls to watch out for.

Enjoy!
Stephanie

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3 most common insurance policy pitfalls

Did you know that not all insurance policies are created equal? Or that policies can exclude some business practices? If you don't know the ins and outs of your policy, you could end up buying less coverage than you need. In this article, we go over three of the most common insurance policy pitfalls plaguing the home inspection insurance industry. Look for these pitfalls when shopping or renewing insurance to ensure you're getting the coverage your business really needs.

Your insurance carrier doesn't cover it.

Exclusions are the portions of your policy that define what you are not covered to inspect. Some exclusions are permanent while others can be modified with an endorsement. (More on endorsements in the next section.) Exclusions allow the insurance company to offer more competitive rates by eliminating business practices that go beyond the policy's intent. Common non-endorseable exclusions in home inspection errors and omissions and general liability policies include:

• Asbestos
• Pollution
• Improper licensure
• Warranty claims

To find out what exclusions lie in your policy, you've got to read it. And before you do, you should know whether your policy offers basic or broad coverage.

• Basic policies state what's covered, and anything that isn't listed is an uncovered inspection. These policies tend to be easier to read because they're shorter, but they often offer less coverage.
• On the other hand, broad policies offer more open-ended coverage than basic policies. If an exclusion isn't on the list, then it's automatically covered. These policies are a tough read but much more comprehensive. (In case you're wondering, InspectorPro offers broad policies.)

Keep in mind that there are insurance carriers that advertise to property inspectors but explicitly exclude home inspection services in their policies. If you receive a quote for hundreds or thousands of dollars less than that of a specialized home inspection insurance provider, be sure to study the policy to make sure home inspections aren't excluded.

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