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Are You Smiling Yet? (you will)
by David Brauner, Senior Broker at OREP.org
Here is the good news that, with any luck, should make you crack a smile: most appraiser E&O insurance policies have a very broad definition of coverage these days, to include reviews, desktops and hybrid/bifurcated appraisals and much more. That means you enjoy broader coverage AND very reasonable rates. That’s the result of a policy written specifically for appraising. This is something most appraisers can feel satisfied about. You will find some specifics below. If you have any additional questions, please ask your agent or call OREP.
I was preparing for a webinar presentation last year and realized that the cost of E&O for appraisers has not gone up significantly in the 25 years that I’ve been an agent. Back then, you could get a policy for about $350-$600. You still can. At OREP you can get a million dollar limit for $478! The premiums vary slightly by state, so please check with your agent or OREP.org.
The coverage is significantly broader also. Most appraiser policies have a very broad definition of coverage these days to include reviews, desktops and hybrid/bifurcated appraisals. Some appraiser policies, including OREP’s, have a zero deductible and free bodily injury and property damage coverage for the property inspection—in case you break a vase or, God forbid, hurt someone in the course of doing your subject inspection. Neither a zero deductible, which saves you out of pocket cash, nor free BIPD, which saves you having to buy that coverage in a separate policy ($350-$500), was included 25 years ago. And I have seen BIPD claims, especially now since FHA appraisals require testing appliances, attics, crawl spaces, etc.
With the OREP policy, the limit is “outside of defense costs” also, meaning the limit you purchase, say $1 million, does not get “used up” by the defense costs. While it’s unlikely that you’ll ever need the extra coverage, that is a great deal more coverage for the same price. The policies I was familiar with 25 years ago were not written that way.
Today, most policies also include generous coverage for state board complaints, legal fees, loss of income, etc. Most of you know that when you stop appraising or retire, you need to purchase tail coverage to…well…cover your tail—meaning to keep the protection for appraisals you did over the years while you were covered. With Claims Made professional liability policies, when you let the policy lapse, the coverage is gone unless you purchase “a tail.” The official name for tail coverage is Extended Reporting Period coverage or ERP. It’s usually offered for one to three years into the future. ERP can be a bit pricy—up to one and a half times the expiring premium—but well worth it in my opinion. But free is even better.
Some programs, including OREP’s, provide free, unlimited ERP when you retire. Certain restrictions apply for the free ERP, like being of retirement age and being with the program for a minimum number of years. If you’re getting close to retirement, this is a very valuable benefit that did not exist 25 years ago.
Another coverage that did not exist years ago is combination coverage, if you do real estate sales also. This is two policies for the price of one—covering appraising and sales. Other coverages have been added over the years at no cost, such as coverage for subpoena expenses, loss of earnings and security incident coverage, which covers you for expenses when responding to a security incident, such as hiring a cyber forensic analyst or costs to comply with state or local privacy laws following a security breach. Discrimination coverage is included and mold can be added. Most of these coverages were not available 25 years ago (as I recall!). Today most are included free in OREP’s policy, which does not cost much more than coverage did 25 years ago! Please ask your OREP agent for specifics, not all policies include everything.
Now, I’d be remiss if I didn’t mention that OREP’s main program includes all this, but other programs may offer some of these features also. What they don’t offer, of course, is OREP’s 14 hours of free continuing education, dozens of free webinars to help you professionally, Working RE magazine and other business support that our insureds use every day.
I hope that no matter where you get your coverage, you find agents who want to help you. I know you will at OREP (if you don’t, let me know!). You can reach me at email@example.com. See, there is something to smile about—even if it’s only E&O insurance.
About the Author
David Brauner is Publisher of Working RE magazine and Senior Broker at OREP, a leading provider of E&O Insurance for appraisers, inspectors and other real estate professionals in 50 states (OREP.org). He has provided E&O insurance to appraisers for over 25 years. He can be contacted at firstname.lastname@example.org or (888) 347-5273. California Insurance License #0C89873. Visit OREP.org today for comprehensive coverage at competitive rates.
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