E&O insurance

[fyrmnk]

Just curious who prefers "Occurrence" over "Claims Made." Also, are the rates ever going to level off?

I've had occurrence for 4 years with Allen. Never had an insurance claim (knock on wood) and my rates still go up every year.

If you do claims made, whats the approximate annual cost for tailender coverage?

I'm getting ready to renew again so looking at the options.

Thanks,

[Scottpat]

I have a claim made policy with FREA. As for Tail coverage, I don't think that it is worth the extra cost. You are paying for coverage in the event that you stop inspecting or change the provider you are with. It is a fact that most claims (90% according to Bob Pearson with the Marion Allen Company) happen within 15 months of the inspection.

As for the rates, they will continue to go up. I predict that by 2010 we will be paying around $7,000 for a basic $500,000 policy with a $2,500 deductible.

It would be great to see ASHI, NAHI, CREIA, FABI, TAREI, NACHI and any other viable home inspector organization band together to develop a professional alliance and an E&O program that would benefit all and would have no specific affiliation to any one organization or person.

[fyrmnk]

Yeah, I'm going to look into the claims made. I think I've been throwing away the extra money every year by having occurrence.

[Paul MacLean]

When I retired, one year tail coverage for my claims made E&O with Business Risk Partners cost about $3300 or one years premium. Considering the $5000 deductible, that means I won't break even unless a claim exceeds $8300.

Still, I bought it. Mostly because the wife sleeps better and I share a bed with her. [:-timebm]

[Brian G]

Originally posted by Paul MacLean

Still, I bought it. Mostly because the wife sleeps better and I share a bed with her.

Ah-so, the wise man invests in peace and quiet...worth every penny.

Brian G.

The Master Knows From Whence His Bread is Buttered [-crzwom] [:-crazy]

[Wayne Wildermuth]

I have always had occurrence and I too need to renew. Need info...what happens when you change carriers on a claims made policy? Do the claims go to the carrier that you had at the time of the inspection or the one you have at the time of the claim? If the old policy ends on say 7/4 and the new one starts on say 7/5 and the claim is from 7/3 but made on 7/6, who covers it or does it depend on the wording in each policy. Do they all have to have what I will call "lingering coverage" for anything that happened during the time of their coverage that is filed after the close of the policy period?

I know this is a tough deal, but I figure I can get the nuts and bolts of it from fellow inspector in language I can understand rather than getting it from an insurance carrier that speaks Greek. Thanks

[homnspector]

"Claims made" means that the insurance has to be in effect when the claim is made. "Occurrence" means that the insurance had to be in effect when the inspection occurred.

That is why "claims made" is generally cheaper. As soon as you quit the company, or are dropped, their liability ends. Also makes it very difficult to go with a new company unless you want to pay double premiums until you figure you are out of the woods.

[a46geo]

Originally posted by Scottpat

SNIP

It would be great to see ASHI, NAHI, CREIA, FABI, TAREI, NACHI and any other viable home inspector organization band together to develop a professional alliance and an E&O program that would benefit all and would have no specific affiliation to any one organization or person.

Scott,

If only we could get this from your lips to divine ears.

If you remember, this issue of self-insurance was really hashed around several years ago, I believe on the ASHI forum as well as here. But for some reason most associations are afraid to even consider it.

Do the math for heavens sake. Lets just say 8,000 QUALIFIED, conscientious, well-trained, experienced home inspectors were to unite. You know the kind, the ones like us that no one has ever had a successful lawsuit against. Lets charge each of them $2,000 a year with a $1,500 deductible. That is SIXTEEN MILLION dollars a year (escalating) fund and no spoiled freezer meat claims.

Step two. No more rolling over and playing dead by passing out $10,000 (nuisance) settlements like Halloween candy. Pay just claims, but fight the stupid claims and even counter sue. Word would soon get out to the ambulance chasers far and wide that the Home Inspection Industry is no longer a big fat sitting duck.

I told the story about how my lodge (FOP 130) went self insured with our own life insurance about 15 years ago. Within 7 years our premiums had dropped from $50 a year to nothing, because the past premiums earned enough interest to pay the future premiums. Coverage, by the way, went from $1,000 to $2,500. Small potatoes you say? … SURE ! But, scale is not the issue; it’s the dynamics that are important here.

Make no mistake insurance is very a profitable business. Just look to where government goes when they need to borrow money. E&O carriers are making huge sums of money off of us. Don’t believe their propaganda to the contrary. The problem is they have no incentives to keep costs down because they just pass them onto us while adding a tidy little margin to boot.

Can we do this? Absolutely!! Will we? Probably not until we get to a place where the premiums are equal to or greater than our gross income. But, by then it will be too late.

George

www.ChampionInspections.com

[Terence McCann]

Good to see you posting again George!

[gwharton1]

Originally posted by a46geo

Originally posted by Scottpat

SNIP

Do the math for heavens sake. Lets just say 8,000 QUALIFIED, conscientious, well-trained, experienced home inspectors were to unite. You know the kind, the ones like us that no one has ever had a successful lawsuit against. Lets charge each of them $2,000 a year with a $1,500 deductible. That is SIXTEEN MILLION dollars a year (escalating) fund and no spoiled freezer meat claims.

Step two. No more rolling over and playing dead by passing out $10,000 (nuisance) settlements like Halloween candy. Pay just claims, but fight the stupid claims and even counter sue. Word would soon get out to the ambulance chasers far and wide that the Home Inspection Industry is no longer a big fat sitting duck.

George, You are F*%&ing brilliant! My last Occurance renwal was $4,400. As soon as we stop playing bush league games with each other, we can do some great things as a group. I do my part, but I am not holding my breath.

Glenn

Glenn