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A claim is brought against you after inspecting a vacant house, and your insurance company wants you to (surprise, surprise) settle it quickly and claim responsibility. However, you didn’t do anything wrong and instead want to fight the claim, but you are afraid your insurance company will bail if you don’t agree to settle.
False. I explain why your insurance company must defend you in this week’s ClaimsAcademy video blog.
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A home inspector recently emailed me with a question about doing pre-inspections for relocation companies. I referred him to a prior post that I wrote on the subject which answered his question. But it reminded me of several cases that I have had involving inspection companies that subcontract out inspections on behalf of relocation companies.
Based on the experience of those cases, if I were a home inspector, I would steer well clear of doing inspections for one of those outfits. For several reasons.
First, in order to get the business from relocation companies, they drop their pants on pricing precipitously. So the inspector who actually does the inspection is very likely losing money on the proposition.
Second, their loyalty is to the relocation company, not the inspector. So the minute that there is an “issue”, they are all too willing, ready and able to adopt a customer-is-always-right attitude despite the mountain of empirical evidence that I have assembled that, when it comes to dissatisfied home inspection clients, the customer is invariably wrong.
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People ask me regularly to explain my business’ mission – and while the end result is easy to quantify (get rid of meritless home inspection claims), its power is best rooted through video, as you can see below in this video that clearly answers WHAT I do and WHY you need me on your side! My interest is in squashing these meritless home inspection claims before they destroy the professional reputation and livelihood of home inspectors across the country.
99% of ALL home inspection claims have NO merit – and you shouldn’t have to fork over valuable capital or lose your insurance deductible to a claim that has NO merit!
Click ‘More’ to watch why you need Joe Ferry on your side.
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I remember the advice I received from a savvy real estate investor as I was about to purchase my first house.
It was listed at $29,000, and I inquired about whether I should offer $28,000.
The investor told me, “If you like the house, don’t lose it for $1,000. Do you know what $1,000 is? It’s $6.00 a month for the life of the mortgage.”
When broken down into those terms, who wants to lose a desirable home for $6.00/month? You can use the same logic when trying to convince possible clients NOT to go blindly with the low-ball home inspector.
I discuss this mindset in this week’s video blog.
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To the ever expanding list of rent seekers that Home Inspectors have to fend off, please add insurance companies that have paid a first-party claim on behalf of a homeowner and then want to recover that payment from the home inspector through subrogation.
Subrogation is a legal concept whereby one party – the subrogee – succeeds to the rights of another – the subrogor – either by operation of law or by contract. The most familiar examples of this concept involve insurance companies that pay losses sustained by policyholders and then seek to recover those payments from tortfeasors that may be legally liable for the policyholder’s loss. The insurance company by virtue of its payment would succeed to the policyholder’s rights against the tortfeasor.
Thus, if an insurance company paid a collision loss on behalf of its policyholder who was not at fault in the accident, it can seek to recover that payment through subrogation from the driver who had actually caused the accident. Health insurance companies and workers compensation insurance companies who pay medical bills on behalf of their insureds will endeavor to recover those outlays from parties who may be legally responsible for causing their insureds’s injuries.
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There’s nothing like a birthday to drive home the point that life has stages: the Immortal Stage that lasts until about age 55 and the Mortal Stage where I am now gaining seniority at a breathtaking pace. Today, I am turning 66. A pair of sixes. Boxcars.
Ever since I became the Irish Patient, I’ve become much more conscious that life has limits. On length. It’s a depressing thought and one you need to let go of for your own sake, as well as the sake of others within your gravitational pull.
Fortunately, there are other spheres where life holds considerably fewer fixed limitations: happiness, job satisfaction, friendships, personal achievement, learning and the like.
One aspect of human nature that has always baffled me is the tendency on the part of some people to create problems where none really exist, notwithstanding that I have been living with a member of that tribe for the last thirty-one-and-a-half years .
To these folks, a rainy day at the beach is an enormous problem. To me a big problem would be something, say, on the order of getting a leukemia diagnosis. Do you see the difference?
Several years ago, I was out sailing with some friends and one of them accidentally threw my anchor overboard. Unfortunately it wasn’t connected to the boat at the time. When he realized what he had done, he was extremely upset and nigh pathologically remorseful. I told him to forget about it. But he wouldn’t let it go.
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One of the techniques that I stress in my home inspector training with the Law and Disorder Seminar for reducing one’s potential for being successfully sued is for home inspectors to strengthen their Pre-Inspection Agreements with clauses that narrow a claimant’s ability to bring a claim by designating contractually the exact circumstances under which the inspector will be amenable to suit.
One of those circumstances is the venue wherein a claim may be brought. As a home inspector, or any business performing services pursuant to a contract, you never want to be in any state or federal court. And for a myriad of reasons.
For one thing, in the context of a residential real estate inspection, any lawsuit is bound to involve multiple parties, a circumstance that is guaranteed to increase the cost and decrease the likelihood of resolution. For another, the cost for the plaintiff to get into court is low. Filing fees for plaintiffs are pretty modest. The cost to you to get out of court, on the other hand, will be quite high. Not only will you have the plaintiff to contend with but your fellow defendants, as well. And while the plaintiff may be very agreeable to letting you out of the suit, your fellow defendants, who will have filed their own cross-claims against you, may not be.
Most home inspectors of my acquaintance have already figured this out and, so, have clauses in their Pre-Inspection Agreements that mandate that all disputes arising from the inspection must be brought in Arbitration. If your client’s attorney has read his client’s Pre-Inspection Agreement, he knows that he will not be able to join you in with the seller, the seller’s agent and broker and his client’s agent and broker. He’ll have to prosecute the case in two separate venues, which he will be loathe to do. Especially if he has heard from me the manifold reasons why you have no liability.
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There’s a well-developed discussion that attracted a lot of commentary on one of the industry message boards that I visit regularly on what reporting methodology, Checklists or Narratives, is better.
The discussion centers on the question of which one is more likely to provide a defense in the event that a claim eventuates from the inspection. What was interesting to me was that, while the narrative format was by far the preferred methodology, each reporting format had its supporters and both received what I thought were insightful critiques of their respective shortcomings.
In the checklist format, the inspector follows a sequential series of questions about the home and simply checks a box to indicate whether the issue was “Satisfactory”, or “Needs Repair” or was “Not Inspected”. Some forms provide a limited space for annotating the reason that an item “Needs Repair” or was “Not Inspected”.
In the narrative format, the inspector states precisely what was inspected in a narrative form and gives a brief explanation why the item’s condition was satisfactory or not.
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By the time a home inspector contacts me, he or she has already made exhaustive attempts to explain to an irrational client why a leak in a roof six months after it was reported as “near the end of its life expectancy” in an inspection report is not grounds for a claim against the home inspector.
At this point, the client’s Rage-O-Meter is near the top of the “shouldn’t exceed” zone. There is no logical discussion that can change the client’s mind or mission to make you pay. While there may be no logical discussion on your end, the firm and steady end of a competent legal counsel can make that claim disappear.
In this week’s video blog, I discuss how to extinguish all of these reputation-damaging threats.
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