Just as soon as Nick buys Texas, Mike . . .
Lord, don’t give him any ideas!
:shock:
NACHI does not get the insurance money. AIG does.
Hi Joe,
I think what he is referring to is if we could do that. Offer insurance and make us all self insured. I don’t know the legal aspects but it sounds like a great idea. We could have a committee of inspectors that review all claims to determine if they are frivolous or not. If a claim is deemed to be frivolous we fight it till the end. In a short period of time we would gain a reputation such as Wal-Mart has for fighting against unjust claims. I feel just as many here do that having insurance is like putting a bulls eye on your back. I am not looking to start a debate about having E&O. I just feel that the idea could have a lot of promise and change our industry.
Great idea I like it .To simple
Roy sr
Certainly worth looking into by the Powers that Be; I’d put my 2k into it if I could be NACHI-insured
The reason I mentioned that remote possibility is that many large companies elect to ‘self-insure’ some of their risk. I’m sure there are laws and regulations on the books that would prohibit truly providing E&O to our members but it might be worth kicking around a little. Another thing, I think E&O should be avaialble in the $25k to $$250k range as that’s what I feel is my biggest risk, i.e. a foundation, a roof, etc not the whole danged house!
Greg -
[BTW, I still have the foto I took of you, ahem, beating me at Hold 'Em.]
That is certainly something that we could contemplate once we have a critical mass of members who actually embrace the NACHI program. Prior to becoming an attorney I was an insurance executive and have a good understanding of the insurance mindset.
What we would have to have initially is a good understanding of our ‘experience’, insurance jargon for ‘how did the program do?’. Once we had ‘credible’, insurance jargon for ‘can we take this to the bank’, experience, we could develop a program. Initially, we would have to ‘reinsure’, insurance jargon for what bookies call ‘laying off’, some of the exposure, say, ‘everything in excess of $20,000’. As we developed the program we could ‘retain’, insurance jargon for assuming, a greater percentage of the exposure. And so on.
A good idea. Just, you know, a few years premature.
Thanks for the reply Joe.
It is nice to know that it may happen someday.
Whats the over/under on the years Joe?
I would say that it won’t happen earlier than six or seven years because:
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we would first have to have significant participation to justify the expense of all the ancillary elements we would need: actuarial, claims, legal, investment, etc. I would say that we would need about 10,000 insureds to get adequate spread of risk. At the industry’s and NACHI’s rate of growth and assuming a 50% participation rate that’s probably about six years away. Of course, that could change dramatically as more and more states adopt licensing and mandate insurance coverage.
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we would have to have several years of ‘credible’ loss experience in order to line up the requisite reinsurance and to promulgate viable rates.
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sufficient investment for operational and surplus requirements.
It’s a tough slog. Doable, but all the planets would have to line up correctly.
What a tremendous boon to both our profession and our association being self-insured would be. My bitch over the years with E&O has first been the cost but more importantly the insurance companies willingness to roll over and refuse to defend frivolous lawsuits making us an indefensible target.
If we are ever able to obtain low cost reinsurance it will be because we decided as a profession to be tenacious in defending our profession from those who believe that home inspectors are an avenue of free lunch. I commend Joe Ferry on the efforts to move us to that place where having E&O does not make home inspectors an automatic target for frivolous lawsuits, count me in.