Warranty

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1

Originally Posted By: kmcmahon
This post was automatically imported from our archived forum.


I have a question to those of you that offer a warranty or guarantee. What exactly are you warrantying?(sp?)


I called a client today that contacted me by email. He got my name thru a customer referral. He asked me if I offer a warranty or guarantee of any kind. I really had no idea what I could warranty or guarantee as what we do is just a snapshot in time. I told him about Wisconsin laws regarding


our liability (see the regs below). He said other inspectors offer a warranty and he would like to get a 3 month warranty. I told him I couldn’t do that, and gave him examples of the facts as to why we are not fortune tellers. I just referred him to the law that said we stay liable for two years for any errors or ommissions.


I could tell this guy (hmong) didn’t have much money and was buying his first home (townhouse). He was nervous about buying it and two months down the road having something major happen and he won’t have the money to repair it.


I told him that I couldn’t speak for the other HI’s that offer this, but it’s doubtful that they really offer anything more than what the law makes them.


Maybe I’m misinterpreting what a warranty covers. Anyway, I booked the inspection for this saturday.


Just wanted your input.


Here's our standard in WI. We are not obligated to offer warranties or guarantees of any kind.

440.976 Disclaimers or limitation of liability. No home
inspector may include, as a term or condition in an agreement to
conduct a home inspection, any provision that disclaims the liability,
or limits the amount of damages for liability, of the home
inspector for his or her failure to comply with the standards of
practice prescribed in this subchapter or in rules promulgated
under this subchapter.

440.977 Liability of home inspectors. (1) Notwithstanding
s. 893.54, an action to recover damages for any act or omission
of a home inspector relating to a home inspection that he or she
conducts shall be commenced within 2 years after the date that a
home inspection is completed or be barred. The period of limitation
under this subsection may not be reduced by agreement.

--
Wisconsin Home Inspection, ABC Home Inspection LLC

Search the directory for a Wisconsin Home Inspector

2

Originally Posted By: jwortham
This post was automatically imported from our archived forum.


Kevin,


Maybe he is looking for one like the ones sold by American Home Warranty?

http://www.ahomewarranty.com/inspectors.html

3

Originally Posted By: kmcmahon
This post was automatically imported from our archived forum.


Well, that’s an insurance policy veiled as a warranty thru a home inspector… Interesting concept. Wonder if you try to sell that to your client or just include it in your base price. He can get the same thru an insurance company.


Thanks for the link.

–
Wisconsin Home Inspection, ABC Home Inspection LLC


Search the directory for a Wisconsin Home Inspector
4

Originally Posted By: jpeck
This post was automatically imported from our archived forum.


I have that included in two ways: First, it is not a guaranty of the system, components, etc.


THIS IS NOT A GUARANTY (anything can fail at any time)
This inspection, and report, is only reporting on the conditions as observed at the time of the inspection, and is not intended to be considered as a guaranty or warranty, expressed or implied, of the adequacy of, or performance of, systems, structures or their component parts or of their remaining life expectancy or usefulness. Systems, equipment and components can, and do, fail - randomly and without prior warning.

Second: It is a guaranty that we will do our best.

GUARANTY (we can only do our best)
The only GUARANTY we can provide is: The COMPANY will provide the CLIENT with the best inspection the COMPANY can, with regard to the LIMITATIONS contained herein and with the limitations placed upon the COMPANY by others, and within the limited accessibility, the non-technical intent, and non-destructive nature of this inspection, and report.

Been using the above for about 15 years, with only minor changes over the years as I've thought of them or others have pointed them out.

--
Jerry Peck
South Florida

5

Originally Posted By: Russell Frame
This post was automatically imported from our archived forum.


I’ve been thinking about this a bit.


I can clearly see that a warranty offered in conjunction with a home inspection is a good highlight in marketing one's services.

But then I get thinking. The HI is essentially a salesman in the eyes of the insurance company. And it has to reduce their liability if they can trust the competence of the HI previewing their covered property.

But what happens when a claim is actually filed???

In my experience the insurance company moves directly into an accusatory role. They are looking for anyone and everyone that they can transfer liability to. The HI would seem to be a prime target.

It sure would be nice to hear from HI's who are already selling these policies and especially some who've had people claim against them.

6

Originally Posted By: tallen
This post was automatically imported from our archived forum.


Russell,


I have often wondered why our insurance is so high ,and yet you never see anyone posting about actually having a claim filed . I am sure it happens. I can also understand why a person might not post such a thing , but I would think someone would. icon_confused.gif

–
I have put the past behind me,


where , however, it now sits, making rude remarks.


www.whiteglovehomeinspections.net

30 Oct 2003-- 29 Nov2005
7

Originally Posted By: Russell Frame
This post was automatically imported from our archived forum.


Yep! That’s sort of the point I was trying to make with the poll that I posted about liability and insurance coverage/claims a couple weeks back. Nobody had a claim, nobody was asked by a lawyer to pay for damages…yet people are dropping about $4,000 per year on coverage.


$4,000 would pay to repair/replace just about any average major home component once a year.

Interesting...

I still dont understand why ins companies arent jumping to offer cut-rate, low-premium, high-deductible E&O.

8

Originally Posted By: tallen
This post was automatically imported from our archived forum.


$4000 might pay for a component ,but it sure doesn’t’ pay for injury or death

–
I have put the past behind me,


where , however, it now sits, making rude remarks.


www.whiteglovehomeinspections.net

30 Oct 2003-- 29 Nov2005
9

Originally Posted By: Russell Frame
This post was automatically imported from our archived forum.


Exactly!


As I remember from my poll a vast majority carried no insurance, then some carried only liability, with few carrying any E&O at all.

Now, lets imagine someone offering a policy that had a high deductible but at a fraction of current E&O prices.

The honest HI who just misses a problem which results in a component failing is out some cash for their mistake but doesn't put a dent in the ins company's pocket.

At the same time the HI has the assurance that if a real tragedy results and their are found at error it wont cost them their life's savings.

10

Originally Posted By: tallen
This post was automatically imported from our archived forum.


The only problem with that is it makes to much sense and not enough $ for our insurance friends.


Although I am sure there are other factors.

–
I have put the past behind me,


where , however, it now sits, making rude remarks.


www.whiteglovehomeinspections.net

30 Oct 2003-- 29 Nov2005
11

Originally Posted By: tallen
This post was automatically imported from our archived forum.


Gone

–
I have put the past behind me,


where , however, it now sits, making rude remarks.


www.whiteglovehomeinspections.net

30 Oct 2003-- 29 Nov2005
12

Originally Posted By: jwortham
This post was automatically imported from our archived forum.


deleted

13

Originally Posted By: kmcmahon
This post was automatically imported from our archived forum.


ok…somone else must have some views here…come now…out with it! icon_biggrin.gif

–
Wisconsin Home Inspection, ABC Home Inspection LLC


Search the directory for a Wisconsin Home Inspector
14

Originally Posted By: Chris Butler
This post was automatically imported from our archived forum.


Russell and Todd,


the costs for E&O are going to continue to go up for Home Inspectors. There are only 4 companies nationally willing to underwrite a HI. 3 of us are RPG’s (meaning we are specifically set up to insure HI’s and we are not a carrier). Leaving 1 company for the country nationwide that you can get coverage through. There are several companies that offer regional coverage as well.


The increases are due to two reasons - one the carrier knows that it is a limited market and playing field - so they are going to charge more; and they are also paying out more than they originally anticipated to cover HI’s due to claims.


Insurance companies are in business to make money, not pay out claims. Carriers review their programs yearly and sometimes bi-yearly to see how their claims history is going. And when you have a carrier that insures a HI for $2,500.00-$5,000.00 (which by the way is not worth the risk for the carrier to insure a HI, as they are not making a substantial profit, in the carrier’s mind) when a payout could be a high as $975,000.00 (current largest payout) that would require a lot of HI’s to cover the costs of that one payout for that one carrier. And what results then is that that carrier bows out of insuring HI’s and some other companies hear of the loss and non-renew their insured HI’s also. So from a carrier’s standpoint insuring a HI who makes 200-400 visual inspections on 1 home and then inspects on average 200 homes a year…


Pretty big risk financially for the carrier.


If you were the carrier, wouldn’t you rather risk insuring a class code like widget manufacturer’s who might have 1 claim every 5 years for a group of companies that the carrier makes millions off of and might payout several hundred thousand at worst versus a class code like HI’s who have hundreds of claims, most frivolous and they carrier makes only hundred’s of thousands and could potentially be upside down on a large payout like the example above…???


Food for thought.


This is information for you as a HI, so you know the marketplace that exists and not something to lambaste me over as I am not a carrier.


Trust me, I am just as unhappy as you when I have to pay for my E&O as a licensed insurance agent which went up this year for me 80%. And I don’t even quote businesses anymore, but by still being licensed, I can be brought into a suit from a former client.


Have a great weekend everyone!


Sincerely,

–
Chris Butler


(former) Director of Membership @ FREA

15

Originally Posted By: John Murray
This post was automatically imported from our archived forum.


Chris Butler wrote:
Russell and Todd,
the costs for E&O are going to continue to go up for Home Inspectors. There are only 4 companies nationally willing to underwrite a HI. 3 of us are RPG's (meaning we are specifically set up to insure HI's and we are not a carrier). Leaving 1 company for the country nationwide that you can get coverage through. There are several companies that offer regional coverage as well.
The increases are due to two reasons - one the carrier knows that it is a limited market and playing field - so they are going to charge more; and they are also paying out more than they originally anticipated to cover HI's due to claims.
Insurance companies are in business to make money, not pay out claims. Carriers review their programs yearly and sometimes bi-yearly to see how their claims history is going. And when you have a carrier that insures a HI for $2,500.00-$5,000.00 (which by the way is not worth the risk for the carrier to insure a HI, as they are not making a substantial profit, in the carrier's mind) when a payout could be a high as $975,000.00 (current largest payout) that would require a lot of HI's to cover the costs of that one payout for that one carrier. And what results then is that that carrier bows out of insuring HI's and some other companies hear of the loss and non-renew their insured HI's also. So from a carrier's standpoint insuring a HI who makes 200-400 visual inspections on 1 home and then inspects on average 200 homes a year...
Pretty big risk financially for the carrier.
If you were the carrier, wouldn't you rather risk insuring a class code like widget manufacturer's who might have 1 claim every 5 years for a group of companies that the carrier makes millions off of and might payout several hundred thousand at worst versus a class code like HI's who have hundreds of claims, most frivolous and they carrier makes only hundred's of thousands and could potentially be upside down on a large payout like the example above...???
Food for thought.
This is information for you as a HI, so you know the marketplace that exists and not something to lambaste me over as I am not a carrier.
Trust me, I am just as unhappy as you when I have to pay for my E&O as a licensed insurance agent which went up this year for me 80%. And I don't even quote businesses anymore, but by still being licensed, I can be brought into a suit from a former client.
Have a great weekend everyone!
Sincerely,


It seems to me that there are E&O claims that we are not aware of.
I wonder if there is a way to get the insurance companies to designate problem "associations" and/or non-association members who may be more subseptable to having claims filed against them?? The insurance companies differentiate car insurance by gender based on statistical fact so why could they not do it here if *someone* promoted the potential for more insurance carrying established business owners??
If they are unable to gather statistical facts due to a lack of association/non-association info at this time; may be *someone* could suggest that they start keeping records for this. A good way to get someone to properly disclose what association he/she is from is to offer a 10% discount NOW!
Non-association members are out of luck and the insurance companies will appreciate the extra requirements involved with becoming an association member which usually seperates them from Joe Blow!
16

Originally Posted By: Russell Frame
This post was automatically imported from our archived forum.


Chris Butler wrote:
Russell and Todd,
limited market and playing field...

Insurance companies are in business to make money, not pay out claims...

And when you have a carrier that insures a HI for $2,500.00-$5,000.00 ...when a payout could be a high as $975,000.00
Pretty big risk financially for the carrier...



How many members for NACHI alone...???

What a load of crap. You mean to claim that 1 in 200 inspectors create a $1 million dollar liability to an insurance company. Give me a friggin break. E&O for HI's has got to be one of the biggest jokes out there.

Give me some hard facts of insurance company HI revenue vs. claims and then I might listen. I think this whole HI E&O market is B.S. propagated by scary stories with little to no substance.

Can you be sued? Sure, anyone can be for anything.

Can you be liable? You bet.

If your are thorough, knowledgeable, and careful are you really a $1 million in 200 annual liability. Pleeeeease. What a joke!