Pay as you go E&O from Allen Insurance?

[Jared C. Hull]

Hi All,

My name is Clay Hull, and I'm new to InterNACHI and to the HI industry. I've recently become licensed in Maryland, and am working on getting up and running, as well as working on the requirements for InterNachi Membership.

One of the main obstacles I am encountering is finding affordable E&O insurance...no way I'd consider going without, but the premiums are prohibitive.

The instructor of the HI course I took for my licensing mentioned a "pay as you go" E&O product from Allen Insurance, and I was wondering if anyone had any experience with this particular company and product?

http://www.allenins.com/Home_Inspect...ECTION_PROGRAM_

Any thoughts or insights would be greatly appreciated!

Sincerely,

Clay Hull

[Ben L. Garrison]

Great idea for new inspectors who don't have the resources to purchase a standard E&O policy. Call Bob Pearson at Allen. He can discuss the pros and cons of this type of policy.

[Scott Gilligan, CMI]

I think it is the best way to go for anyone starting out. Pay for what you use. You are probably not going to get enough inspections your first year to offset the price of a full policy and all the extra riders. The Pay Per Inspection plan covers a lot of riders you would typically have to pay extra for in a standard policy.

[Ben L. Garrison]

From the Inspector standpoint, my only concern is that the inspection is only covered for a year from the date the inspection was completed. And you have to purchase a standard policy in order to maintain the coverage. I'm pretty sure that is how it works, but Bob at Allen can confirm for sure.

The insurance company runs a risk of too much adverse selection for this type of insurance program. Thinking worse case scenario, their fear is that the inspector will only insure inspections that he/she is uneasy about. For example, if you did an inspection for a friend or family member, chances are you will not be sued. So why pay to insure that report? On the flipside, if you did an inspection for a lawyer or another high risk client, you better insure that report. Ins company is stuck with a lot of bad risk potentially.

I wish there way effective way to make this work for everyone.