How long would you carry your E&O.....

[Ben L. Garrison]

Originally Posted by Scott Schultz

by the way, who was the genius that came up with a claims made policy? You got to love insurance that you pay for and are insured at the time of said inspection, but then cancel your policy and the insurance doesn't have to pay even though you were covered by them on that date. claims made policies should be outlawed as they are the biggest rip-off around.

"Claims made" policies make up the majority of all the E&O policies being offered these days. How could an insurance company stay in business if it collected only one year's premium, theoretically, yet was on the hook for potentially 300 inspections that you did in one year? For up to 4 years after those inspections were performed? The alternative is a more expensive occurrence policy. Pay 'em now, pay 'em later.

[pdacey]

Originally Posted by rray

Hey, Patrick.

If your company no longer exists in Texas, and you are no longer in Texas, I see no reason to have tail coverage on your Texas inspections, even if you still have personal assets in Texas.

Real estate is a state thing, so you'll probably find that you can't be sued in Maryland for real estate problems in Texas. We commonly have that problem here in California with so many people moving out of state. They'll fail to disclose something significant, and then when the buyer decides to go sue, he finds that the sellers are now in a different state and can't be sued. We call it "disclosure by flight," i.e., "I'm fleeing to another state so any disclosures that I should have made won't affect me."

The exception would be if your real estate problems in Texas resulted in death or personal injury. Consequently, if I were in the same situation, I would not continue tail coverage.

Interesting info Russel. I'll have to speak to an attorney in TX and check on that.

My license is still active in TX until July of 2008. I renewed right before I left figuring that it would help since MD didn't have active licensing requirements when I moved here. But I don't see me doing inspections anytime in the near future so I probably won't renew it next year.

[Russel Ray]

Originally Posted by pdacey

My license is still active in TX until July of 2008. I renewed right before I left figuring that it would help since MD didn't have active licensing requirements when I moved here. But I don't see me doing inspections anytime in the near future so I probably won't renew it next year.

An active license doesn't necessarily mean that you're in business although it does lead the unknowing into believing that you are in business. However, anyone interested in suing you would have to serve you, but for real estate matters not involving death or personal injury, it not only would be difficult for someone wanting to sue you to serve papers in another state, but you wouldn't necessarily have to respond since you're not in that state.

I believe there are a couple of states (I don't think Texas or Maryland were them) that would enter a default judgment if you didn't respond or make an appearance at the "trial," thereby making it difficult for you to visit the state and/or making it difficult for you to dispose of any assets. Generally, though, exclusing deaths or personal injury, a lawsuit involving real estate probably just ain't gonna happen if you're in another state unless you have a multi-state business, such as a franchisor (not necessarily the franchisee, though).

[Ben L. Garrison]

Originally Posted by rray

An active license doesn't necessarily mean that you're in business although it does lead the unknowing into believing that you are in business. However, anyone interested in suing you would have to serve you, but for real estate matters not involving death or personal injury, it not only would be difficult for someone wanting to sue you to serve papers in another state, but you wouldn't necessarily have to respond since you're not in that state.

I believe there are a couple of states (I don't think Texas or Maryland were them) that would enter a default judgment if you didn't respond or make an appearance at the "trial," thereby making it difficult for you to visit the state and/or making it difficult for you to dispose of any assets. Generally, though, exclusing deaths or personal injury, a lawsuit involving real estate probably just ain't gonna happen if you're in another state unless you have a multi-state business, such as a franchisor (not necessarily the franchisee, though).

Let's put this in a relative context. You inspected my home 6 months ago, made a legitimate mistake in the report but had since relocated to Oregon. I file suit in Texas. Texas is where the inspection took place so that's the State that has jurisdiction over the matter. You decide you don't have to respond to the suit because 1) You no longer have insurance & 2) You're in Oregon.

I get a default judgment against you for $100,000 and hound you for it for the next 20 years. It would not be difficult for me to garnish your wages, obtain a constructive trust on any of your assets and destroy your credit so you would never get a mortgage, buy a car, get a credit card or even rent an apartment... until you paid up.

I might be biased, but I think the tail policy is worth some consideration.

[Russel Ray]

Originally Posted by bgarrison

I get a default judgment against you for $100,000

That would probably buy 95% of the homes in Texas!

[Ted Allen]

Originally Posted by rray

That would probably buy 95% of the homes in Texas!

? Ever been to Highland Park??

[Russel Ray]

Originally Posted by tallen

? Ever been to Highland Park??

Yeah. Highland Park in Dallas and River Oaks in Houston make up for the other 5%.

[Andrew Cox]

Originally Posted by rray

That's more common than one thinks, which is why I highly recommend continued follow-ups after the inspection. I follow up after 3 days, after 14 days, after 30 days, when I know escrow has closed, 30 days after escrow closed, 90 days after escrow closed, six months after inspection, and annually forever after the inspection.

RR,
What do these followups consist of? A phone call? EMail? Do they ever get tired of hearing your voice? Or do you bring them a margeurita to go?

[Russel Ray]

Originally Posted by acox

RR,
What do these followups consist of? A phone call? EMail?

Uh-oh (long-time readers should remember why).

I do my follow-up between the hours of midnight and 0600. Depending on my established rapport, I will call their office phone (where I always get voice mail) or send them an email. Both are the same:

"Hey, [name of person]. I just wanted to follow up to see if you, or anyone else, had any questions or if I can do anything else to help. Please feel free to contact me if I can do anything to help you at any time."

Originally Posted by acox

Do they ever get tired of hearing your voice? Or do you bring them a margeurita to go?

They don't seem to get tired, or at least I've never had anyone contact me and say,
"Will you please quit contacting me?"
or
"I'm really tired of hearing your voice."
or
"I'm really tired of getting your emails."

Instead, I get something similar to the following:

"Hi, Russel. Thanks for following up. I've never had anyone follow up on a home inspection before. What an awesome idea. We don't have any questions, but we'll call you if we do. Thanks, again."

That one is from last Thursday, a Realtor who had never used me. Her Clients had a Referral Rewards check from a Client for whom I did an inspection on November 27, 2005. That didn't sit well with the Realtor who had her own inspector of choice, and she was only too happy to let me know that at the inspection. Every five minutes, "The inspector I use would/would not have done...." It's always tempting to say, "Shut the *&(*&$#$ up," but my wise ol' grandmother said, "Try to treat everyone with respect. You'll win more friends that way."

(The bold, underlined wise ol' grandmother is at the suggestion of one of my Canadian friends. He enjoys my wise ol' grandmother's words of wisdom and said that he now looks for my posts that have my wise ol' grandmother's wisdom in them. He asked if I could bold and underline them to make it easier for him to find them. Sure! Hey, if he's looking for my posts, is that stalking? )