Originally Posted By: glittle1 This post was automatically imported from our archived forum.
Chris ,I really didn’t think your reply for the absolute rip off cost for E & O insurance was answered. Please understand im not directly pointing my finger at you , but geez , the cost is so high I cant afford it without a loan or selling my first born !!! Personally I’ve been a In Home Estimator for floor coverings and kitchen measurements for several years and I am responsible for all errors on the jobs I quote. And let me tell you I am a picky s.o.b. and very thorough and communicate exceptionally well verbally and in document form , all without any insurance ever. Call me lucky or call me stupid but I believe in myself and ability to over deliver on all my jobs.With the current cost of E & O insurance it appears your expected to make an error , I prefer to have coverage but not at the cost of a “used car”, and what about people like myself with years of working in a similar industry , any break on the cost ???
Originally Posted By: Chris Butler This post was automatically imported from our archived forum.
Dear Mr. Little,
if we did not have the purchasing power we do with our particular carrier - the cost would be anywhere (and I am assuming) from $6,000-9,000 US dollars for the same product for a HI. The thing is that our carrier would not write any home inspectors at all directly. It is not a market they want. Because we come to them with a 9500 member base is the reason they even do it. I cannot answer why the carriers do what they do. And if we did not have the buying power that we do, we would not have been able to come in to Canada and you would be left with in theory no carriers to go too. As St. Paul only took 5% of 500 guys in September, 2003. If you took out the 3 risk purchasing groups (FREA, Allen, and BRP) within the states, there would be only 2 carriers willing to write HI’s nationally - Lexington and Evanston - both available through your local independent insurance agent. And 2-4 of the regional players as well. Pretty slim pickings.
Trust me as an agent here licensed in California, going to meet with a client on the day he renews to deliver his quote with a 72% increase from the previous year was always fun. Especially when his work comp. was already at $1.2 million and I am there to give him the above increase of $864,000. With the client in question having no losses and an actually decrease in his x-mod. he would throw up his arms and ask me why. And I would then show him the other 15 quotes - 3/4 of them that would turn it down due to the risk and the other 1/4 at a higher rate than the above. Makes you want to do business in California. And part of the answer is that insurance companies were "buying" business during the late 90's to get market share and as much premium as they could, then they would reinvest into the stock market for a higher rate of return then they used to do under bonds and other low risk markets. The underwriters were instructed by the management of the carriers to get the business. So instead of the rate being $25,000 for a GL policy for a company they would undercut it and write it for say $15,000, all to get the premium which would be reinvested in the Stock market. This practice resulted in what was called a "soft" market as the risk was not rated properly and as the losses came in some companies were drastically upside down and have gone out of business. Over 100 companies alone in California regarding work comp and on a national level - Kemper. When the market went south and 9/11 happened, the carriers went from buying business to not writing any business at all in some class codes and drastically increasing rates across the board. This is just one of the factors that resulted in increases across the board and the one I know about the best. There are others if you delve into insurance magazines and annual reports from carriers over the last several years. Another would be because of this pull-back by the carriers from certain class codes - the available places to place a business with a carrier dropped dramatically as well and it then became a supply and demand issue. Fewer carriers willing to underwrite the business led to higher costs as well. As the remaining players then had more clients and thus more exposure. The three biggest increases (or four) would be: Personal Health Care, work comp, and depending on who you ask in the industry - professional liability or personal home coverage. These segments have gone up anywhere from 50-500% over the last 4 years.
Don't kill the messenger
Originally Posted By: gbeaumont This post was automatically imported from our archived forum.
Chris Butler wrote:
Most claims come from the following four areas - Structural - 32%, Roofs - 18%, water penetration - 12% and termite - 8%.
I am wondering if there are any common patterns, within the figures that you have provided. In particular are there areas where we could improve on our SOP or be better educating our members ??
Structures: can you break this down into, foundation, Slabs, framing etc
Roofs: what is the issue on claims here, covering, sheathing, structure, flashings etc
Water penetration:In what areas is this being missed and why, are we talking about basements, roofs etc
Termites:where in the structure are these being missed, and pehaps more importantly should we all be recommending a seperate WDI inspection as per FHA/VA/HUD ??
As you know, I am trying to build a picture of what we can do, if not to lower rates now at least slow down the rates of increase in future for our members. I think we all understand that the insurance companies have taken on too much poor risk in the last couple of decades, but there has to be a way to lessen liability.
Time for a drink now  
