Insurance Question

[Ben L. Garrison]

Originally Posted by jbushart

I'm delaying "judgment" until I can get some facts, Ben.

Forgive me for not relying upon your "tons" of calls from people who ring your phone "all day" in numbers that you do not record and from conversations taken from the "top of your head" as heavily as you do.

Yup... I'm lying... You got me. I'm just here to get as many clients as I can from the 20 inspectors who are reading this thread... And no better way to do it than make up stories to hopefully scare inspectors into buying insurance.

You are getting confused in the contexts in which I'm writing which goes beyond the message board. Keep in mind, I insured inspectors in all 50 states although you probably need some facts to back that up, right? Let's face it... you don't carry E&O insurance and I get the impression that you've never carried E&O insurance as you "honor your contract" and don't have a need for it being an error proof, perfect inspector. It's unfortunate that more inspectors are not like you but then again, guys like me wouldn't exist if they were, right?

[James H. Bushart]

Originally Posted by bgarrison

Yup... I'm lying... You got me. I'm just here to get as many clients as I can from the 20 inspectors who are reading this thread... And no better way to do it than make up stories to hopefully scare inspectors into buying insurance.

You are getting confused in the contexts in which I'm writing which goes beyond the message board. Keep in mind, I insured inspectors in all 50 states although you probably need some facts to back that up, right? Let's face it... you don't carry E&O insurance and I get the impression that you've never carried E&O insurance as you "honor your contract" and don't have a need for it being an error proof, perfect inspector. It's unfortunate that more inspectors are not like you but then again, guys like me wouldn't exist if they were, right?

I don't really care to engage in angry banter with you, Ben. I can understand your defensiveness and your need to divert the conversation away from the simple request for facts ... but I am not following that lead.

My question was addressed to Pam ... not you. You chose to engage in this conversation with the same lack of credible information that you choose to provide whenever the topic comes up.

Get back to your phone ... the one that rings "all day" with the "tons" of inspectors insured by your company who need your assistance in dealing with the many lawsuits and potential lawsuits that are being filed on a daily basis...that are obviously too numerous for anyone to tabulate. Don't let this stuff keep you from such important business as that.

I'll just wait to see what type of data Pam might ... or might not ... be able to provide.

[Ben L. Garrison]

So whenever I comment/counter any of the rumors or myths you hear through the grapevine about E&O insurance rate increases, cancellations, etc., etc., which is fairly easy because you don't have any data or first hand experience of your own, you return to old faithful.... So typical.

Have a good weekend.

[James H. Bushart]

Originally Posted by bgarrison

... because you don't have any data ...

I've asked for it but you say that you don't have any, either. Without data, all you can offer is opinion ... just as we all can and do.

[James L. Keilson]

Originally Posted by bgarrison

So whenever I comment/counter any of the rumors or myths you hear through the grapevine about E&O insurance rate increases, cancellations, etc., etc., which is fairly easy because you don't have any data or first hand experience of your own, you return to old faithful.... So typical.

Have a good weekend.

I have seen you asked several times and never once have you provided any data either ? Do you have this data or is all what you say simply your opinion or a sales pitch ? Spill the beans if you have them, if not we know the real answer.

Jim

[Michael Larson]

Which episode of the Bushart Garrison show is this?

I have lost track.

[Joseph Hagarty, CMI]

I recall from a thread many years ago...
that a claim occurs on an average of 1 in every 1500 inspections completed.

[Billy Boerner]

Originally Posted by jhagarty

I recall from a thread many years ago...
that a claim occurs on an average of 1 in every 1500 inspections completed.

That I believe.

[James H. Bushart]

Originally Posted by jhagarty

I recall from a thread many years ago...
that a claim occurs on an average of 1 in every 1500 inspections completed.

Still looking for that data.

We have that claim ... we have the guy selling software that was marketed as preventing lawsuits that claimed that data existed to show that one in three inspectors would be sued ... and another vendor claiming that according to his studies, in the course of their careers, every inspector would be sued.

When asked to provide the actual data from which they made these claims ... all admitted, like Ben, that they had never actually seen such numbers. They were "told" by "reliable people" that their statements were accurate.

We know that all insurance companies subscribe to actuary services where data is compiled for them to use to calculate their rates. Somebody knows exactly, for any given year, how many home inspections were actually conducted and of those --- how many resulted in lawsuits. They also know of those that actually resulted in lawsuits, how many were insured and how many were uninsured.

Premiums are based on those numbers. This is why when a new company pops up with extremely lower premiums ... a red flag should go up and inspectors should consider the possibility that such a company is in the business of collecting premiums, only, and not paying claims.

Or ... the other possibility is that the other carriers who have access to the same raw data are grossly overcharging.

At least one lawyer has published that home inspectors who go to court and arbitration usually win. We also know that insurance companies will often force inspectors to pay settlements instead of going to court in order to save themselves the expense of winning the case. Is it possible that ... when one actually adds up all of the money paid out in inspector lawsuits in 2009, that three fourths or more of the payouts came from the inspector's deductable and the remaining 25% came from the money insurance companies collected in premiums? If this were true, would inspectors not be better off paying their premiums into an interest bearing business account and paying out the "settlements" on their own?

Either way ... unlike the data for other forms of insurance ... the data behind the need and/or the premiums for E&O is conveniently missing. Since the actual facts are guarded and kept away from our unworthy eyes ... we will never really know for sure, will we?

I recall a lawyer (who also sells E&O insurance related services) posting on our message board that we would "not know what to do" with the information if we had it. He then blasted what he called "lowballing" inspectors who did not advertise their E&O on their websites. He was getting some mileage on this until it was pointed out that he, himself, did not advertise his own malpractice insurance on his own website. Lawyers, as you might know, have successfully fought legislation in states that would require them to carry their own E&O because --- according to the lawyers --- it would "invite frivolous lawsuits" against them. Of course, who better than a lawyer would know about the incentive for a frivolous lawsuit, right? But back to the point...

We don't know the actual numbers that the insurance carriers have and conceal from us ... but we do know this. Laws are passed in some states that require home inspectors to carry this insurance to be employed. We also know that the option to cover (or to continue to cover) and inspector is at the autonomous whim of the insurance carrier. Good inspectors who have two or three frivolous lawsuits that could have been won in court ... but were settled by insurance carriers to save court expenses ... can have their insurance coverage cancelled and be forced out of business. Of course, this would happen AFTER he paid his premiums and paid out all of his deductables for the settlements.

I believe that the situation is such that inspectors have a right to know the facts that the insurance carriers intentionally conceal in this regard. I don't expect insurance salesmen to agree with me on this.

[Ben L. Garrison]

"Good inspectors who have two or three frivolous lawsuits that could have been won in court ... but were settled by insurance carriers to save court expenses ... can have their insurance coverage cancelled and be forced out of business. Of course, this would happen AFTER he paid his premiums and paid out all of his deductables for the settlements."

Jim, are you speaking from first hand experience of being cancelled or non-renewed by an insurance company or what you perceive to be the case? Or from the experience of other inspectors? Either way, I understand that is a common misconception about insurance companies and how they operate. Well, it's a misconception about the way we operate. We take a good look at the claims that have been filed against an inspector when determining their insurability. If the inspector has done nothing wrong yet the insurance company spends money to resolve claims on his behalf, then why should we cancel him? Now, should the inspector has 4 frivilous claims filed against him in 1 year, then it might be time to adjust the rates accordingly. Wouldn't your auto insurance or health insurance treat you the same way? Furthermore, if we insure an inspector who continues to have claims issues and is extremely bad risk with considerable losses (yes... they do exist, Jim. Not every inspector is a "good inspector."), then they run a risk of being non-renewed. We are not going to insure toxic risk for the sake of keeping a very costly and high risk inspector operating in your industry. Insurance is a business just like yours and the name of the game is to make money by managing risk. If you don't believe in insurance and would rather operate without it, then don't buy it. More power to you...

[Joe Farsetta]

Ben,

I think Jim eludes to the law of averages when it comes to the insurability of an inspector. If an inspector gets sued three times and either settles or loses in court, the carrier would likely look to drom him/her whenever they could. This happens across the board with insurers (home, auto, etc) So, why would it be any different for an E&O carrier. IN recent years, carriers have also tied one's credit score to premiums. the theory is that if you have poor credit, you are more lilkely to commit insurance fraud. I'd love to see the research behind this one.

We are at the mercy of the carriers. This goes for ALL carriers and ALL insurances.

As to mediation and arbitration, so long as the process is not opressive, courts have upheld arbitration clauses. Many attorneys simply do not like this, as they cant hide behind motions and procedural mumbo jumbo. The arbiter sets the rules.

I would be curious to know how pre-paid legal services work in the event of a claim to an E&O carrier. IAS is very careful in advising its clients that carry E&O that they need to be mindful of the terms and conditions as set forth in their E&O policy.

Some E&O carriers prefer arbitration, and rightfully so. Prevailing on a technicality as opposed to truly getting to the bottom of a claim sucks for everyone.

So, how can one write a letter, on attorney letterhead, and send it to opposing counsel, when not sanctioned by the carrier? If there is some secret language, or a wink and a nod from the carrier, I'd like to know about it. this would creat an unfair advantage to a company like IAS that colors within the lines and plays by the rules when it comes to the carriers.

I write well crafted letters FOR our members to do with as they like. I NEVER put the writing on IAS letterhead (or my own) as I am not an attorney admitted to the bar in any state.

I am also curious as to how NACHI has singled out ELITE MGA as THE preferred insurance provider for the association.

[Ben L. Garrison]

Originally Posted by jfarsetta

Ben,

I think Jim eludes to the law of averages when it comes to the insurability of an inspector. If an inspector gets sued three times and either settles or loses in court, the carrier would likely look to drom him/her whenever they could. This happens across the board with insurers (home, auto, etc) So, why would it be any different for an E&O carrier. IN recent years, carriers have also tied one's credit score to premiums. the theory is that if you have poor credit, you are more lilkely to commit insurance fraud. I'd love to see the research behind this one.

We are at the mercy of the carriers. This goes for ALL carriers and ALL insurances.

As to mediation and arbitration, so long as the process is not opressive, courts have upheld arbitration clauses. Many attorneys simply do not like this, as they cant hide behind motions and procedural mumbo jumbo. The arbiter sets the rules.

I would be curious to know how pre-paid legal services work in the event of a claim to an E&O carrier. IAS is very careful in advising its clients that carry E&O that they need to be mindful of the terms and conditions as set forth in their E&O policy.

Some E&O carriers prefer arbitration, and rightfully so. Prevailing on a technicality as opposed to truly getting to the bottom of a claim sucks for everyone.

So, how can one write a letter, on attorney letterhead, and send it to opposing counsel, when not sanctioned by the carrier? If there is some secret language, or a wink and a nod from the carrier, I'd like to know about it. this would creat an unfair advantage to a company like IAS that colors within the lines and plays by the rules when it comes to the carriers.

I write well crafted letters FOR our members to do with as they like. I NEVER put the writing on IAS letterhead (or my own) as I am not an attorney admitted to the bar in any state.

I am also curious as to how NACHI has singled out ELITE MGA as THE preferred insurance provider for the association.

Regarding your last sentence... I would assume it revolves around money in some way, shape or form. ASHI endorses BRP just the same. Most times when you get the endorsement, from a vendor standpoint, it's because you offer something in return to whoever is endorsing you rather than the actual quality of the product.

Good point about the credit score as it pertains to auto insurance premiums. I still don't understand the correlation between the premium for auto insurance and the credit score. I figured it had to do with the insurance company somehow making the connection that a poor credit score results in high accident rate, not the possibility of insurance fraud. I have no clue...