Insurance: that annoying but potentially beneficial thing we pay good money for and hope to never use. Insurance can protect your car, your business, your family, your home and more. The downside? It can often put a big red target on your back that says “sue me.”
While much has been written about the multitude of complex reasons behind the collapse of the real estate market in 2007, it is the opinion of this writer that there is one primary reason for the collapse. Simply stated, banks loaned money to borrowers who lacked the ability to pay back the loan. That’s it, pure and simple. If you loan money to someone who has no resources to pay back your loan, you will lose money almost every time and it matters very little if you have any collateral for the loan. This should be known as the prime directive: “Thou shall not loan money to someone who cannot pay you back.” There certainly are many other reasons behind the collapse, but if the “system” had not violated the prime directive the collapse would not have been so sudden, so precipitous, and so prolonged
When I was in law school about 100 years ago, my real property professor mentioned “caveat emptor” in almost every class. Loosely translated this means “let the buyer beware.” The legal principle behind “caveat emptor” is that a person who buys something without any kind of warranty is responsible for making sure it is in good condition, and if they don’t take this responsibility, then tough luck.
To say that there has been an enormous change in the real estate industry over the last few years is an understatement. Appraisers have taken most of the fall for the housing crisis, and continue to experience the effects of the fallout. Here are five critical issues that will continue to impact our industry if we don’t take a stand and fight back now.
Despite the fact that California has some of the highest personal taxes of any state in the nation, it is nonetheless buried in debt. Governor Jerry Brown estimates that California’s current debt load is somewhere in the neighborhood of $132 billion, which has forced the government to make deferred payments to school systems, Medi-Cal patients and public employees' retirement funds. In light of these circumstances, one option the state might want to consider would be the so-called “mansion tax.”
The latest and greatest technology may be a boon to your home inspection business, but it’s likely not covered by your E&O carrier. While tech advances quickly for inspectors, insurance companies have yet to catch up and therefore may not offer appropriate levels of coverage just yet.
One of the requirements of your job as an appraiser is getting to the property to appraise it. Unless you are appraising a property within a few blocks of your own house or office, chances are that you will be driving there. Today, the costs of driving -- higher gas prices, higher insurance premiums and higher maintenance costs -- have gone through the roof.
In the auto insurance business, there is a phenomenon known as the “red convertible,” in which claims for theft and accidents are much higher rate than other vehicles. A similar reality is known among real estate insurers as “the repeat claims offender”. When it comes to raising red flags, if these offenders didn’t have bad luck, they’d have no luck at all.
On May 23, 2014, the Court of Appeal for the Fourth Appellate District, Division One, State of California, issued a very interesting decision on whether a plaintiff can successfully plead and argue fraud based on comments made about the concluded value of real estate that was appraised. The case is Graham V. Bank of America, N.A., et al. Although this ruling is unquestionably useful for an appraiser being accused of appraisal fraud, it probably is not the magic elixir many will proclaim it to be.
Whether in the field or at the office, there’s much at stake every day. Yet, many of us continue to overlook the importance of professional liability insurance.
Commonly known as errors and omissions - or E&O - insurance, these policies are designed to protect you against legal recourse should a lawsuit be filed against you. However, not all policies are created equally, and premiums are continually on the rise. So what’s the story behind these additional costs?