How much E&O and why?

[Terrel L. Shields]

The average claim will be much lower than the average minimum required by a client. I carry $500,000 and would carry less if one client didn't require the $500,000.
IMNSHO, E & O is totally worthless. They will throw you under the bus out of shear terror. They intended to insure you but they didn't intend to stand behind you. Now that the anst is started expect to see rates double or triple over the next two years.

 

[Abester]

$0 - cause I'm cheap

 

[Roscoeman]

Well, I have been sued recently and dismissed with prejudice. Although, my case was dismissed the E&O company incurred approx. $35,000 in lawyer's fees. My E&O policy at the time and currently is for $500,000.

As you all can imagine, I was cancelled by that E&O insurer.

I purchased tail coverage, as it was mandated by my new insurer. It cost $1,000 for the 3 years previous.

If you think you are being charged to much...I guess be grateful you are not in my shoes.

My insurance went to alittle for 4 times than I was paying.

The appraiser on my defense advised that maybe my E&O was to high.

Who knows....

 

[Darrel Clark]

I haven't had E&O insurance for years. My business is run through a corporation; all major assets are in a trust. Although this is not full-proof, it does make it somewhat harder for someone to get anything from a law suit. I expect anyone wanting money will go for the deep pockets -- those of you with big E&O policies. This year, will be 20 years that I have been appraising. Prior to the early 90's, E&O insurance for appraisers was almost unheard of. I wonder how we got by all those years without it.

 

[Terrel L. Shields]

Prior to the early 90's, E&O insurance for appraisers was almost unheard of. I wonder how we got by all those years without it.

That's the point. Pre-E & O I defended myself and am confident enough to do so now. I have it for one reason. I number 2 client requires it. If they didn't I would drop it tomorrow. A claim, even in winning, means the E & O is dropped period. "Loss Prevention" "Where there is smoke there is fire" whatever excuse they have. It is like your home insurance being dropped because a tornado hit you. You should have known better than to build your house in the path of a tornado....stupid logic.

 

[Lawrence R.]

I hate E&O

I have it b/c #1 lender mandates it. They mandate a huge policy too.

It always comes due at the worst possible moment and every year I want to drop it, but I don't.

I am a sucker.

 

[Darrel Clark]

What I find interesting about lenders requiring E&O insurance is this. As most of you know, your E&O premiums go up every year. As long as you stay with the same insurer, you are generally covered for prior appraisals during the time you were with that insurer. But, you could shop around every year, change insurers and get the lowest premiums possible. You would have E&O to satisfy the lender.

I believe that most E&O claims happen three to seven years after the appraisal was completed. So, even though you have E&O, like the lender required—in this scenario, any appraisals done in prior years wouldn’t be covered. And those older appraisals are the ones that are most likely to result in a claim. So, having required the coverage, the lender would still not be covered for their claim. Doesn’t make sense to me.

 

[Michigander]

You can buy "tail coverage" but it ain't cheap. It seems E&O insurers are wary of "fee shoppers" and punish them accordingly.:new_all_coholic:

Tail coverage only goes for a short period, no matter how pristine your record. LIA has 3 years only. After that, you are screwed.

 

[Michigander]

What I find interesting about lenders requiring E&O insurance is this. As most of you know, your E&O premiums go up every year. As long as you stay with the same insurer, you are generally covered for prior appraisals during the time you were with that insurer. But, you could shop around every year, change insurers and get the lowest premiums possible. You would have E&O to satisfy the lender.

I believe that most E&O claims happen three to seven years after the appraisal was completed. So, even though you have E&O, like the lender required—in this scenario, any appraisals done in prior years wouldn’t be covered. And those older appraisals are the ones that are most likely to result in a claim. So, having required the coverage, the lender would still not be covered for their claim. Doesn’t make sense to me.

LIA "insists" that most claims happen within the first 2 years. I rather doubt that, and I would imagine given the run up in the market and subsequent down-turn, we are looking at a lot of complaints from 2000 - 2005 (hardly 2-years ago).

 

[liberated]

I have been with LIA for 12 years and assumed that I was covered for all prior appraisals as I have kept the same coverage with the same company. Does this hold true?