Texas insurance offers are rolling in

Thanks to the wonderful wisdom of the TX legislature, the E&O insurance offers are starting to roll in. In the last week I’ve gotten mail from Naplia and FREA.

Other TX inspectors seeing the same thing?

Nothing from Naplia…never heard of them. I did receive something from FREA but since I just renewed my NACHI endorsed Towers Perrin policy, that apparently no one can match premiums with, then I didn’t pay much attention to it. I think FREA was offering a $100,000 policy for the same premium or more than I can get a $500,000 policy elsewhere. I have had several conversations with a broker in St. Louis that is trying to put something together for Texas HI’s. I told him that what was needed was a $100,000 policy with a $1,200/yr premium. He understood and planned to work towards that end. I don’t expect to hear back from him though.

A $100,000 policy that costs $1,200 year? Probably have a $50,000 deductible for that cost.

With a couple more Companies looking at Home Inspectors .
I would not be surprised if established HIs will be able to get insurance with $2,500:00 deducatble for about that price.
with many years claims free insurance companies should love us.


I think $2500 deductible is still a bit low for that price. But it won’t surprise me if you see companies roll something out at a low rate like that. The program will have a tough time surviving for an extended period of time though. They won’t collect enough premium to offset the claims they’ll inevitably be paying.

Got any data you would like to share to support that claim Ben?
Like number of insured to number of claims perhaps?

The formula is pretty simple for the insurance company. They need to collect more in premium than they pay out in claims to make a profit as we all know. The data will be a rate increase after a year or so in my opinion. Often times insurance companies make a quick entrance into the E&O line of insurance for inspectors and a very quick exit too.

Come on, Ben. If an insurance company is loosing money they can make it up in volume…jeez. :smiley: :stuck_out_tongue: :wink:

If it were only that simple :wink:


In the last year or last 3 years or whatever time period you choose, can you tell us how many claims were made, how many were paid, and the total amount of $ paid out by FREA for HI claims? How many were settled out of court, how many went to court, what the legal fees were, what the judgements were?

We always hear from insurance companies stating that insuring HIs is expensive but we never see any hard data from them to support that stand. On the other hand, a poll here (with a small sample of members responding to be sure) shows not much in the way of suits and payouts.

There is an opinion (deserved or not) by HIs that the insurance companies do tend to rake us over the coals without justification.

In TX, until now it has been a business decision on whether or not to carry E&O insurance. Now we will have no choice. Inspectors in other states already have no choice. When one does not have a choice, one tends to look at things a little more cyncically.


I don’t blame anyone for being a cynic when it comes to insurance. You’re paying for something that is intangible. Unless you find yourself in a lawsuit. Then you recognize the value of it. I don’t like paying for my auto insurance, certainly not my health insurance being a 28 year old single man with hardly any claims. And it goes up each year inevitably. I guess I’ve just come to accept it.

Now, to answer your question, FREA is not the insurance company and I personally don’t have a way to extract that specific data from our system. That rests with AIG.

As you probably know, FREA is a membership organization. Our goal is to provide the strongest policy with competitive rates, each year to do just that. Consistently, it’s been with the same carrier. This is not a FREA commercial, but I can say that we have not raised rates since September of '05.

Ah therein lies the rub Ben, for I as a consumer have all sorts of charts, graphs, spread sheets, and actuarial tables to examine (in the public domain) for both health data and number of car accidents/thefts in my area to help me decide if I am truly getting what I am paying for.

They have been exorbitant since then also so there has been no reason to raise the rates!