We just having fun with you.
Satisfied clients are more willing and apt to refer than any agent (no conflict of interest) and they don’t expect referring party coverage, just a thank you card and a goodie now and then because I want to not that they expect it. I like this idea more and more.
Thanks Manny
I will contact him.
Greg,
You are most welcome. Hopefully you are able to use his information to your advantage.
I should have also mentioned Mr. Dupuis extended his offer of contacting him to anyone else out of the state of Texas. He will try to provide the information you need.
I just got this from Mr Dupuis the E&O broker.
Check it out.
I would STRONGLY suggest reading the entire policy. Particularly the exclusions. Generally when things look to good to be true, they are. Read the fine print because you don’t want to find out something was excluded once it’s too late.
Hello Ben,
How about posting a copy of the actual policy/policies FREA is offering through their program. Please don’t post the FREA advertisement but the actual policy with actual wording, clauses, etc. In that way we can compare what those policies offer with the one discussed here.
Good idea…I’m betting it won’t happen, though.
Why don’t you get ME a copy of their policy so I can dissect it and decide, without bias, if what you’re buying is legitimate. Don’t you think that would make more sense considering I am in the insurance biz? For those of you who know me, and Nick can attest, know that I am a no b.s guy and will gladly offer my honest opinion.
Look, I’m not trying to tell you to buy insurance from FREA, not Allstate. I am just issuing caution. I think I speak for all the major E&O insurance operations across the country when I tell you that something is just not right with a $250K policy at $880. It simply will not work at that price. The claims Allstate will pay will definitely be FAR greater than the premium they collect. Unless there’s a $10,000 deductible or something. And even then, I don’t see it working long term.
To put this in a relative context, would you, as inspectors, be somewhat skeptical if all of a sudden a new Inspector pops up in town and is charging $35 an inspection? Would you question the quality and accuracy of the inspection? I would guess that you would. And who knows, this might be a legit program but it’s worth doing the research rather than get burnt.
Ben,
You have just slapped the face of every Inspector on this board (not to mention all others). Do you believe that Inspectors are not intelligent enough to perform a basic comparison of insurance policies? I can not speak for other Inspectors but I for one am offended that you feel an Inspector is incapable of doing this!
Now to answer your questions:
First off to answer your question no I do not necessarily think that makes more sense as I am quite capable of such a simple process as comparing insurance policies. I am required to spend thousands of dollars every year on my insurance needs and perform comparisons quite frequently to ensure I am receiving what I am paying for.
Your statement infers that there is much more behind the scenes in the insurance business that we as consumers of the product are not allowed to know. What might those conditions/circumstances be?
It is interesting that you have become the voice for the E&O insurance industry. Your words here indicate that behind the scenes in the E&O industry there is far more to be known that the consumer is allowed. Is there price fixing occurring within the industry?? Why will it not work?
Could it be that the underwriter of this policy is attempting to use this as a marketing ploy, while still providing proper coverage, to draw in a major portion of the E&O business as well as the GL, etc.? Could it be a new underwriter in the HI E&O business willing to take a chance that claims will not exceed revenue from premiums in an attempt to gain the business? Of course only the underwriter can truly tell us that.
You are certainly reaching with the $35 inspection price reference. Although we are constantly battling the $99 Inspector. Of course if you read the many threads regarding this you will see it has been hashed out many times.
You are ABSOLUTELY CORRECT regarding this statement. It could very well be legitimate and that is why those interested in this offering are doing their research. However, you seem to have issues with providing actual copies of the policies your various underwriters use. Why and how can we do our research if you do not provide those? We already know what your premium prices are so we do not need to file an application with FREA to obtain copies of the contracts. So why are you so hesitant in providing the contract wording?
Manny,
Contact me and I think I can help with some of that information you are seeking for comparison purposes.
Kevin
Never did I say any inspector is not capable of comparing policies and making an educated decision, that is simply wrong. Let me put it to you this way… If I had a question about a home inspection, the contents of a report, a comparison of one inspectors report versus another, or anything pertaining to the industry, my first move would be to go to a home inspector. Someone who is well versed in the arena. Let’s not twist words and meaning, and make out to be the bad guy here when I’m trying to offer advice.
Mostly what people who pay for insurance see is the check they cut to the insurance company. What they DON’T see is the money, in the form of claims, going out the back door. Unless they get sued of course. That is why you will see the rates among the big players in the E&O industry in a close range.
E&O providers, at one point a few years ago, were paying approximately 2 million dollars more in claims than they collected in premium. Does that sound like a profitable business? Not so much.
I am not your adversary here. Please understand that.
It’s not just the policy you have to compare (see if they indemnify agents, cover pools, spas, etc, like FREA does) but also the underwriter. For instance FREA isn’t an insurance company, it’s a trade association like NACHI is. FREA only uses admitted carriers. FREA covers agents. FREA gives zero deductible for CMIs. FREA has an in-house attorney on standby to help you when you need one even outside a claim situation. FREA is one of the companies I would deal with if I were serious about the inspection business. You get much more than just E&O.
Things that look similar on the surface are often very different once you dig a little. For instance, there is a little do-nothing, non-profit association-looking organization managed by a for-profit company owned by its Executive Director out of Minneapolis which on the surface appears to be a legitimate trade association… that is until you compare www.nachi.org/benefits.htm
Same thing.
When talking about that “other” association, you really seem to get get “pumped up”.:mrgreen:
Sorry… I couldn’t help it.
I hope I don’t get sued now.
John, you read me like a book.
Ben,
Then how about providing copies of the policies to us so that we can perform comparisons?
You stated the E&O payouts for a few years ago. What are the recent payouts? Was this large payout statement based strictly on Home Inspector payouts or the aggregate for all professions? Do you have a publicly available source of actuarial data for the RE Industry that our members can view, including Agents, appraisers, Inspectors, etc.? Specifically what, with fairly recent supporting data, has prompted the extreme costs of E&O for Inspectors Vs. RE Agents and Appraisers?
Another very large cost factor in any insurance is the number of levels between the agent and the underwriter. Each level that handles that policy is, of course, going to add their fee to the policy. How many different concerns are handling the FREA offered policies before they reach the HI?
Excellent questions Manny. I’d like to see those numbers as well but I won’t hold my breath. I suspect that there are really only a very small handful, maybe even 2-3, true underwriters of HI E&O. I agree that by the time those provider’s offerings get trickled down through numerous agents that are adding to the cost then the prices are inflated. I see references on my policy to 15% commission and, while I fully admit that I do not know exactly what that means, it would seem that is the agent’s cut. So, who are the real underwriters? AIG, Lloyd’s, Lexington are ones that come to mind but it would be interesting to know how many and who the real insurers are and the closer we can get to them then the cheaper the insurance would be. Just as an example, my policy references the following entities in one form or the other and you can be sure each one is making money from it…Lexington Insurance, Towers-Perrin (producer), AI Risk Specialists Ins, Southern Risk Specialists and Direct Bill Services.
You guys gotta understand that, to some degree, the policy (there is only one through FREA) is proprietary information and available to those who are members. I have nothing to hide but I highly doubt AIG wants me publicly publishing that kind of information. It gives competitors the opportunity to duplicate/copy what we are doing. That should not come as any surprise. I’m sure you can get a copy if you ask around.
With regard to the claims, I am referring specifically to the home inspection industry. The insurance carriers/providers have to recoop their losses as they are trying to make a profit just like you. I would hope that your inspection fees are greater than the cost of performing the inspection? Now, the claims experience across the industry is getting better and I think that is attributable to better education through organizations such as NACHI, better technology, etc., etc. That is why FREA has not had a rate increase since September of 2005. What other carrier can say that? But insurance companies have to make a profit. They answer to stockholders and you gotta follow the money. Just like any other business, yours included. It’s profit driven.
I, at my level, don’t have the specific data you’re looking for. Remember, FREA is not the insurance carrier. We work on behalf of our membership. And there is one degree of seperation between FREA and the underwriter. The reason for going through an Association such as ours or Allen Insurance. It’s about service. You have a problem, potential claim, etc., etc. you call us. You call Bob Pearson with Allen. We are here to help you. Not just collect a check and be done with it.
The reason why there is a drastic difference between rates for Appraisers versus Inspectors is simply claims and frequency. The real estate market, in most of the country, is not doing so well and people want to pass the buck onto the Inspector. Buyers remorse? Who knows? But generally speaking the Appraisers get sued by the fiduciary. But not often at all compared to an Inspector being sued.
These conversations always seem to digress into this topic. Back to the original point, be careful with what you’re buying is all I am saying. I will offer my unbiased help to anyone who’s looking into insurance. I had a guy call me yesterday asking me the differences between my policy and a competitor and why he was saving $1000 through them. I simply told him that he’s better off with the competition with that savings. And I would move to them if I were him.
Michael is right for the most part. There are not too many true underwriters of E&O insurance for the inspection industry. Although Lexington insurance is actually AIG. But they are a non-admitted carrier. Just like Lloyds.
That’s exactly what I expected Ben, that is that Lexington is AIG. Now, who does Allstate, State Farm, Nationwide and the others use or are they the underwriter? This will go to help understand the two recent new players (agencies, not underwriters) that have been discussed here on the bb.