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E&O May Not Cover Hybrid Appraisal Products

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hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
I read on another forum where an appraiser said that his E&O insurance company doesn't cover desktop appraisals.

I read my policy (again) and didn't see that kind of specific language. So, I called my insurance administrator (Landy). Here is the response I received (and it is specific to their insurance carrier, which is Great American Insurance Group):

  • Hybrid appraisals (where someone else inspects the property and an appraiser then relies on that inspection as part of the valuation analysis) are not covered
  • A desktop appraisal (no reliance on anyone else) is covered
  • A review appraisal from the desk is covered

As an appraiser, I don't have an issue with the hybrid appraisal (relying on another's inspection and then completing the valuation based on that information). But, the insurance company does and stated such an appraisal would not be covered. Regardless if I have an issue with the hybrid or not, as an appraiser, I would not take on such an assignment knowing that if something goes awry, I'm on my own (now, if I didn't have E&O, it wouldn't make any difference).

The underwriter with whom I spoke with told me things could change in the future. But as of now, hybrid appraisals (as I described above) are not covered by my E&O insurance.

Best advice is for anyone who is interested in this type of work to call their own carrier first and then make their decision.


EDIT TO ADD: I just received a phone call from the insurance broker (the president of the company) who apologized and told me I was given bad information. These assignments are covered under the Great American Insurance Group; please see post #89 for the update.
 
Last edited:

TRESinc

Elite Member
Joined
Dec 1, 2011
Professional Status
Licensed Appraiser
State
Ohio
Since the risk should be proportional to the SOW, or lack thereof, wouldn't it be reasonable to charge more for hybrid and desktop appraisals?


reasonable, definable. practical? not so much since they already want to pay so little.
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
So, only the really stupid appraisers would sign up for hybrid and desktop appraisals. Of course, the quality of work would reflect that business decision. :rof:
I know a few not-so-stupid appraisers who don't carry E&O, so that may not impact them (however, I doubt any of those appraisers would take such an assignment for the pay, anyway).
 

ucbruin

Elite Member
Joined
Mar 11, 2014
Professional Status
Certified Residential Appraiser
State
Massachusetts
Who do you believe would sue the appraiser?

The AMC/ client who assigned the desktop to the appraiser?
 

ucbruin

Elite Member
Joined
Mar 11, 2014
Professional Status
Certified Residential Appraiser
State
Massachusetts
I read on another forum where an appraiser said that his E&O insurance company doesn't cover desktop appraisals.

I read my policy (again) and didn't see that kind of specific language. So, I called my insurance administrator (Landy). Here is the response I received (and it is specific to their insurance carrier, which is Great American Insurance Group):

  • Hybrid appraisals (where someone else inspects the property and an appraiser then relies on that inspection as part of the valuation analysis) are not covered
  • A desktop appraisal (no reliance on anyone else) is covered
  • A review appraisal from the desk is covered

As an appraiser, I don't have an issue with the hybrid appraisal (relying on another's inspection and then completing the valuation based on that information). But, the insurance company does and stated such an appraisal would not be covered. Regardless if I have an issue with the hybrid or not, as an appraiser, I would not take on such an assignment knowing that if something goes awry, I'm on my own (now, if I didn't have E&O, it wouldn't make any difference).

The underwriter with whom I spoke with told me things could change in the future. But as of now, hybrid appraisals (as I described above) are not covered by my E&O insurance.

Best advice is for anyone who is interested in this type of work to call their own carrier first and then make their decision.

"The underwriter with whom I spoke with told me things could change in the future. But as of now, hybrid appraisals (as I described above) are not covered by my E&O insurance."

Did you ask the follow up questions....
Why could things change...
What would have to happen for things to change...
When would things change...
 
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