Insurance Premiums for the New Guy.

[Scott A. Hand]

I am a new home inspector and I am looking for the best insurance premiums I can find. As we all are. I know that the mere fact that I am new in this business will probably cause me some hurdles, but because I'm new I need to find the lowest cost premiums I can find for my situation.

Right now I have seen the Pay-per-inspection plans that run around $600 for a 10 pack. I am in Iowa and in need of some help regarding this situation. I definately don't want to overpay.

My years in Management, sales and customer service will lend themselves well to this business because of my personal accountability, attention to detail, confidence, coachability, humility (knowing that I don't know it all) and my dedication. My character and integrity is my foundation. Regardless of experience and training, without a strong foundation you won't last, in any business. I believe that it isn't necessarily how long you have been in business, as much as it is HOW you conduct your business. However, those things alone will not get me lower premiums!

Are there any options out there for me?

I appreciate the help on this matter.

Sorry to ramble.

Scott
www.inspectintegrity.com

[Nick Gromicko]

www.nachi.org/insurance.htm

[Larry D. Kage]

http://www.nachi.org/forum/showpost....&postcount=110

[Maxim Kiss]

When I just started, I paid around $3,400 for the 1st year. The coverage was good, but the premium was astronomical! Now it's much cheaper for me. One piece of advise: you have to have a decent coverage, so 1 claim doesn't put you in a poor house. Also, hire a good attorney to review your client inspection contract or write a new one.

[Nick Gromicko]

... or use InterNACHI's which is the result of hundreds of legal man hours (something you probably can't afford) and many years of tweaking (something you probably don't want to do).

It has never lost in court, is time tested, and not one line has ever been struck or ruled unconscionable in any court in N. America.

[Scott A. Hand]

I appreciate you guys helping me out. Good to know that there is endless resources through InterNACHI to help us with everything.

Nick, you ROCK!

Scott Hand
Integrity Home Inspections
www.inspectintegrity.com

[Justin Watts]

For your first year.... I highly recommend Allen's Insurance (Occurrence) type coverage. This will cover you for the 4 years of coverage after each inspection in case this inspection business is not right for you.... If you purchase (claims made) type insurance, you will have to buy tail coverage to cover your liability for 4 years after your inspection...

My first year, I bought Allens for this reason, and since my biz has been good I switched to the cheaper claims made with Allen's... They are really good and will take care of you.

Just my thoughts,
Justin
www.americandreamhomeinspection.net

[Scott A. Hand]

What are you paying Justin. For the year on premiums? And does Allen require all money up front or a % up front and monthly after that?

What are your thought on the "pay per inspection" insurance policies?

Thanks for you help.

Scott

www.inspectintegrity.com

[Justin Watts]

Hi Scott,

Here's a breakdown for you..... Through Allen's, for a 1 million Error and Omissions Policy is $2,500 per year (paid in full) to avoid finance charges, and my General Liability was purchased separately through Mercury Casualty for 1 million in coverage was $500 per year.

I purchase my E and O / General Liability separately to obtain (SEPARATE) LIMITS.... watch out on just adding a General Liablity policy on an E and O policy, the limits may be shared... If you are paying for General Liablity insurance protection make sure the limits are separate for better protection.

Let me know if you have any other questions... I have researched the insurance issues inside on out in our industry.

The three best companies are:

AIG - either bought through Allen's or NACHI's broker used to be Towers Perrin, but I think they sold out to another brokerage (Guys correct me if I am mistaken) The program through NACHI, the brokerage was waiting to get their license in California. I almost got screwed since they didn't tell me they were licensed in CA, and my coverage for claims made almost expired... ALLEN INSURANCE, SAVED ME!!!!!!!!!!! they are awesome! And I like giving them my business.

OREP - is really good... just google them (great protection at a great price but deductibles are high for claims)

FREA - is also excellent... great protection but costly. (you get what you pay for) and deductibles are very low for any claims....

TARGET - THEY ARE EXPENSIVE! I wasn't interested.

Hope this helps!
Justin
www.americandreamhomeinspection.net

[Justin Watts]

Scott,
Yes Allen's does finance you.....but if you can pay in full... save yourself $300.

As for the pay per inspection program... It is VERY EXPENSIVE! If you are a newbie, it may be worth checking out. I highly recommend obtaining "Occurrence" coverage either through the pay per inspection program, or occurrence policy with Allen's, which is more expensive but worth the protection for just starting out.

Occurrence vs. Claims made coverage (YOU NEED TO KNOW THE DIFFERENCE) Only Allens offers the Occurrence coverage out of all the other insurance agencies.


Occurrence coverage - covers you up to 4 years after your inspection. No matter what usually. Even if you go out of business, your policy is still in effect.

Claims made - ONLY COVERS YOU WHILE KEEPING THE INSURANCE CURRENT. Its like AUTO INSURANCE. If you stop renewing your insurance, you have to pay for Tail coverage, and its not cheap. If you have any gaps between coverage, you are screwed, you have to renew on time and keep your nose very clean....

I switched from Occurrence to Claims made once my business was established... and I am not going to retire, not for another 20 years. So claims made is the best option for me. If you want the ultimate protection go Occurrence coverage.

Hope this helps!
Justin

[Justin Watts]

Scott,
if you want to review my inspection agreement, feel free
You can download it from my website, it pertains to California... (limit of liability language, etc) check it out if you are interested. Its 4 pages long.

www.americandreamhomeinspection.net

[Schuyler W. Hellings]

Finance charges on the E&O premiums I have provided to Home Inspectors range anywhere from $70 - $100 depending on the premium. I also DO NOT charge Brokers Fees on either policy (General Liability or E&O). All Home Inspectors need to be aware of this, it is pure profit to Insurance Agents / Brokers that are already getting paid commissions on the products they've sold.