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E&O rates are going up again. It is suppose to be because of "claims".

Where are these claims coming from?

How many of you guys have actually been to court over one of your inspections?

Did you win or lose?

Now how many have had your E&O carrier pay out on a bogus claim just to make it go away?

SO FAR .... I have had neither. However, I know of 3 guys that have had the pay-em-to-go-away crap happen to them. Is this what is actually driving our rates out of reach? If it is, its not really insurance at all, its a con job. Are we being conned? Are our rates going up because more lawyers are getting hip to the easy money?

Insurance companies are known for two things. It is where Uncle Sam goes to borrow money and they have some very creative bookkeeping procedures. Like buying up land in Alaska for oil exploration and calling it a failed palm tree farm.

What are your experiences and thoughts?

George

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George,

It has been my contention since learning of the high rates in 2000 that the insurers saw a good thing and they will milk it untill we finally say enough.

I got "sued" about a yr. ago. I responded to the claim made by the client's attorney, met with him once, and made it clear that no E&O insurance would be involved. I knew they would roll over and pay and with my deductible at 3 grand, no way. Suit got dropped 3 days before we were to see the judge.

I have since dropped my E&O coverage after thinking about the math. If 500 of us put $1,000 each in a kitty, we could hire our own shark to investigate any and all claims and still have a nice Christmas party at the end of the year.

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This came up on the ASHI forum not all that long ago, and somebody suggested that we should self-insure (ASHI) for $1000 per year and send pit-bull attorneys against every claim. The idea was that after a while (when the word got around) nobody would bother unless they had a super case and it was big. I thought it was pretty damn good idea.

6800 x 1000= $6,800,000 the first year. That would buy a lot of pit-bulls.

Brian G.

Sic Em' Boys [:-dog] [:-dog] [:-dog]

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Brian,

I remember. I think the term was after a short while.

ASHI, NACHI, CREA, NAHI and every other HI organization you could think of could all work together for this one very important equally shared concern.

Insurance is a business. It is a very profitable business. If profits are not obscene, they are considered to be "down". I think that a group of 6 to 10 thousand HI's each kicking in $1,000 to $1,500 for the first few years could see their E&O premiums paid by dividends after a few short years. In other words ... FREE.

Until then, I think I am going to follow Bob's lead. I think he would be a fun guy to party with anyway.

George.

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I've had my experience w/ it. I was sued about 5 years ago for "deteriorated plaster" in a 110 year old building. When we did our discovery inspection to see what was what, we found a new stairwell to the 3rd fl. where the alleged deteriorated plaster was supposed to have been.

The company settled, although I could have fought it and won. Fighting would have cost about $15,000, and the suit was for $10,000. Shake down, pure & simple. I paid, as it wasn't worth my time to fight it.

The self insurance concept is the way to go, although trying to get more than about 50 home inspectors all moving in the same direction is like herding cats. I would have forked over more than twice what I forked over for branding, & would have gotten something for the money.

Does anyone think that we could actually get 6000 inspectors all working together for insurance?

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Kurt,

Sure do.

If there are indeed 40,000 of us (as is the guess), we are talking about 15% of the HI population.

Would 15% of the inspectors that pay $4,000 a year for E&O be willing to drop that payment to $1,500? I sure think they would.

Now mind you, 40,000 would not necessarily be invited. We would have to set some minimum standards. Any big fat accidents in Florida just waiting to happen would have to prove himself first.

George

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Originally posted by a46geo

Would 15% of the inspectors that pay $4,000 a year for E&O be willing to drop that payment to $1,500? I sure think they would.

I have to agree, the financial motive there is very strong. The devil, of course, is in the details. [:-dev3]

How do you guys like the ring of this? TIJ Specialty Insurance of America. What the heck Mike, if you can do a website, how about an insurance company ?! [:-thumbu]

Brian G.

Sign Us All Up, Hire a Few Pit-Bulls, Make a Few Million [:-tophat]

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We can't herd cats, this is true. But out of 6,400 members of one HI organization, probably less than 100 dropped out when corralled. These guys were not sitting around clamoring to be branded. It wasn't even an issue. E&O however is a big issue for a far greater percentage of us.

Setting up off shore is not necessary, complying with regulations is not impossible. Neither is hiring the right people to administer the program. For those of us who see a day (in the not to distant future) when we wont be able to afford E&O, this may be our only viable alternative. For those of us who are fortunate enough that E&O costs are not an issue, this is not important.

Call it what ever you like, but self insurance is accurate, either individually, or as a group.

The money in the pool is not sitting in someones pocket, it is invested.

I have absolutely no knowlegde of any large E&O pay outs. But it would be interesting to know the details. Were these settlements on behalf of HI guys like our friend in Florida? Some guys you see trouble coming a mile away. We have already established we are not insuring just anyone.

Since many of us can see a day when we can't afford E&O and since more and more states are passing licensing laws which require E&O, if this is not the answer, what is? Most of us are open to suggestions, please present one.

George

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We had a claim about 5 yrs ago.

The E & O carrier did not want to settle. At arbitration the insurance carrier offered a 700.00 token. The claiment refused. Said he was going to sue us in small claims court 5 times.

The first thing the claiment said to the judge in chambers is "this inspector has a very good reputation and I used him because he had insurance". He bragged to the claims adjuster that he had sued in some other state and won 3 times.

The judge awarded him the inspection fee, we had a 2500.00 ded and the legal fees amounted to 8,500.00.

That turned us off of E and O. It was very evident that claim that would not have been filed if we did not have insurance.

Ellen

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Ellen

I took Georges' advice and got E&O from that Napow Hartford guy for $50 per year. I know it be no good but my client doesn't.

Client: Do you have E&O?

Me: Yep and it's from the Hartford casualty would you like the policy number?

Client: No. Are you available on Tuesday?

Me: I'll be there.

6 months later.

Client: I'll need that policy number for your E&O insurances. The garage door did not go back up when hitting an object.

Me: What was that object?

Client: My cat.

Me: My oh my. Policy number 46465745-0 Hartford

Next day

Client: I called up Hartford and they told me that it was a scam perpetrated upon unsuspecting Home inspectors.

Me: my oh my.

Client: Do you have any other insurance?

Me: nope

Client: I was really hoping to have fluffy stuffed. Well thanks for all your help.

Me I'm sorry

Client: Well as long as I have you on the phone, could you please explain this in your report. "The garage door did not stop when meeting resistance, and did not reverse. The opener should be repaired or replaced Recommend having item(s)corrected by a competent professional licensed garage door technician."

Me: my oh my

Captain

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George,

I used up my party ability by age 32, will be sober 25 yrs. in Aug. That is not to say I wouldn't love to meet each and every one of you.

Minimal standards would help keep costs down and those standards could be pretty high. The insurance could actually be a vehicle for recognition of excellence on a national level. There might even be a way to do a non-profit set-up. I think we mostly agree that eliminating the bottom feeder nusance suits would engender the most savings. I know that an occasional ligitimate claim will be made, but if it is known that member inspectors will also be protected, the gnats will go elsewhere.

Even if this goes nowhere, I am really glad to be witness to this dialog.

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I think to do it, and not lose the entire kitandkaboodle of working capital in one fell swoop to one unethical client - as has been discussed above - you'd have to vet every applicant, peer review their performance and demand exceptionally high standards of all inspectors in the pool - making it clear that if they are negligent and don't dot every i or cross every t that they are S.O.L. as far as protection.

I'm thinking mandatory minimum number of hours of classroom and on-site training; not just substantial compliance but absolute compliance with a published set of standards; a mandatory inspection protocol that leaves no room for the inspector to skip something when he's feeling lazy or nobody is looking (remember that TV documentary); photographs of every issue reported as well as installed systems; no quickie, friendly to the house inspections; no checklist report systems and a single, uniform PIA that is clear and simple to understand, ironclad, yet brutally frank in terms of managing the client's expectations - including a flat-out prohibition against obtaining estimates or having repairs made until the inspector has had a chance to view and photograph the alleged omission or error and the PIA is signed and received by the inspector a minimum of 24 hours prior to the inspection.

Also a flat-out prohibition against inspectors dealing with a complaint personally or acknowledging fault. Instead, they refer all complaints to the carrier for a thorough investigation by the carrier through a team of the best home inspectors that can be hired, and their investigation confirms that the inspector erred. Even If the inspector screwed up, the whole thing goes to the legal team to fight tooth and claw not to settle or to settle for as little as possible. Then, only if the inspector was at fault and a settlement is reached, does the inspector pay a deductible. No settlement, inspector not at fault, no deductible paid.

Every inspection report to be hard printed and filed for a minimum of 7 years and copies of every inspection filed electronically by the insurance provider in each client inspector's file so it can be accessed immediately by the insurance provider.

A phalanx of pit-bull, take no prisoners lawyers, thoroughly knowledgeable about this profession, dedicated to the proposition that most claims are bullshit and skilled in every tactic used by their brethren in liability lawsuits and top of their class in the art of snacking on poorly prepared bloodsucking ambulance chasers and mold-is-gold twerps.

Yeah, I think that would preserve the funds long enough to get a comfortable cushion built up to protect the pool, while at the same time kicking the stuffing out of all of the established every-kind-of-insurance firms that are in such an all-fired hurry to settle, because they understand little to nothing about what an inspection is and presume that all of us are losers and crooks who do lousy inspections and deserve to pay through the nose.

Yeah, that'd do it.

ONE TEAM - ONE FIGHT!!!

Mike

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Originally posted by Douglas Hansen

It sounds like the insurance cooperative would review the inspector's reporting system.

It sounds like the insurance cooperative would have veto rights over certain report statements.

Who does those things? I'm still pretty new and have only signed with one company, but the others I first looked at didn't do either of those.

It sounds like the insurance cooperative would retain pit bull attornies to minimize claims damage.

That they are not doing, by and large. The tendency to concede small claims is a big problem. They think it saves them money, but that's strickly a short-term mentality. I've said this before, but the electrical supply I worked for would go to court to collect 50 cents, even if it cost them $100 to do it. After a while the whole problem went away, to our softer-target competitors.

Let's not assume that just because they are insurance companies they are evil (except Napadow).

Let me be the first to confess to that frame of mind where insurance companies are concerned. They're on my short list of industries that are never, ever to be trusted, along with chemical companies, lawyers, pharmaceuticals, and anyone who supplies big-ticket items to the military. To my mind, they've all earned a place on that list in my lifetime. Then again, I can be a bit cynical at times.

If it weren't required here I wouldn't have it. I'm a man of modest means with an LLC, a no-holds-barred inspection business, and a local population of hard-heads who don't like lawsuits, I don't need it. But in two years I've paid almost $8000 for it to comply with the law. I wish I had it in my bank account instead.

And speaking only for here, if every inspector doubled their prices tomorrow, almost nobody would pay it...here.

Brian G.

Ramblin' On

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Originally posted by rosreservv

I used up my party ability by age 32, will be sober 25 yrs. in Aug. That is not to say I wouldn't love to meet each and every one of you.

Hey-hey, one of my tribe. I was done at 27, made my 14th year sober in February. The good news for the rest of you guys is that if we ever wind up doing the town at some convention, Bob & I can be the designated drivers. If anyone pukes in the car they're out, right Bob?

Brian G.

Friend of Bill W. [:-drunk]

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Um,

You can add me to that list of designated drivers. I quit alcohol January 23rd of 1973.

I do drink near-beer when I'm out with folks. It has a tiny bit of alcohol, but I rarely drink more than a couple before I start to feel too bloated to drink anymore. Guess I'm just getting old.

ONE TEAM - ONE FIGHT!!!

Mike

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I went out on the town last week with a bunch of old friends. We went to a local pub that was hosting a benefit/dinner/dance/fund raiser/thingie.

I had two beers and was at home, and in bed, by ten o'clock PM.

Party is a fluid word. Its meaning changes with time. When I said "party with bob" I meant it in the old coot meaning of the word. I know what I am and I know who I was addressing.

So stop bragging about how boring you are, I have you all beat.

George

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Or,....To take them to the right hotel, dump them into bed and then go out onto the strip, bring back drag-queen hookers, put them in bed with the incoherent, unsuspecting inspector [:x] and then take pictures and post them on the internet. [;)]

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Originally posted by a46geo

So stop bragging about how boring you are, I have you all beat.

Who said anything about boring, all I said was I don't drink anymore. I'm every bit as full of s**t now on Dr. Pepper as I ever was then on bourbon & Coke, I just don't need the booze to get there. Hell I live there, ask my wife.

But then, I'm stating facts already in evidence, aren't I. [:D][:-dev3][:D]

Brian G.

The Human BS Channel [:-dopey]

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