Timing of Home Inspection Claims

When I was assembling the material for my home inspector training at the Law and Disorder Seminar a little over four years ago, I gathered some data about home inspection claims from an underwriter for an insurance company that is a major player in the home inspector professional liability insurance market. And while talking to an insurance underwriter can definitely cause drowsiness, I took one for the club and learned one interesting factoid concerning the timing of home inspection claims.

Sixty percent of claims against home inspectors, according to this underwriter, are presented within the first year after the inspection. Ninety percent are presented within the first two years after the inspection. The other ten percent arise more than two years after the inspection.

While this company extracted those percentages from a huge database of claims over many years, the numbers are actually almost congruent with my own experience over an obviously much smaller number of cases and shorter period of time.

When home inspectors contact me for help in responding to a claimant’s demand, I always request a copy of any correspondence between the inspector and the claimant or the claimant’s attorney, a copy of the inspection report and a copy of the pre-inspection agreement. The correspondence tells me the nature of the complaint. The inspection report tells me whether or not the claim has validity. And the pre-inspection agreement tells me what contractual defenses the inspector may have.

Claims against home inspectors result from some alleged defect with the property that is “discovered” subsequent to the inspection. They rarely have any validity because home inspectors, as a general rule, are not negligent. Like most professionals, they know what they are doing, have a tried and true regime that they follow and execute that regime well.

After I have spoken with the inspector and read the inspection report, I am never surprised to discover that the newly “discovered” defect was a. concealed at the time of the inspection [about 50 % of cases], b. working at the time of the inspection [about 15% of cases], c. discovered at the time of the inspection and reported [about 15% of cases], d. disclaimed due to inaccessibility at the time of the inspection [about 10% of cases] or e. outside the scope of a home inspection [about 10% of cases].

Since, in none of those instances is negligence implicated, I never have any difficulty crafting a written response denying the claim on substantive grounds. And, if the inspection agreement limits the time within which a claim can be brought to one year from the date of the inspection, I can also point out – in forty percent of the cases – that even if the claim were valid, which it is not, it would be contractually time-barred anyway.

Thus by the simple expedient of having a clause that requires her clients to assert their claims within one year of the date of the inspection, an inspector can eliminate forty percent of all potential claims against her. This is a valuable piece of home inspector training!