Why Real Estate Appraisers Need Insurance
There are more than 85,000 real estate appraisers across the United States, and The Bureau of Labor Statistics predicts that number to grow. Real estate appraisers assess the value of homes, buildings, and complexes and have the power to make or break any sale. Actively working with the public and making recommendations to lending sources opens the doors risk, lawsuits, and claims. The only way to fully protect yourself is to buy real estate appraiser insurance.
Companies in this industry estimate the fair market value of real estate.
Risks Real Estate Appraisers Could Face
At first glance, some may think real estate appraisers face little or no risk, but that is not the case. Risks you face include:
- Unhappy Customers: You are an expert at determining real estate value. But, you’re not perfect. If you calculate a home value that causes a seller to lose money and they file a lawsuit alleging miscalculations, you can be required to pay their loss.
- Bad Recommendation: The basis of your business is to give advice. In some cases, appraisers offer advice to sellers on how much they can list their home for on the market. If your advice is wrong, they can hold you accountable for the difference in listing price an actual value later on.
- Injury: Appraising homes and buildings requires you to visit the property, walk through, and analyze what you see. During a typical walk through, you trip and knock over an armoire of valuable china. You are responsible for replacing the damaged items.
- Auto Accident: Roadways, highways, and other drivers are unpredictable. Sometimes you have the best intentions driving to a property but can end up in a car accident. If you are at fault for the accident, your appraisal business can end up responsible for significant expenses.
Types of Coverage Real Estate Appraisers Need
If you own a real estate appraisal business, you need general liability and commercial property insurance to cover the basics. Some appraisers are required to carry appraiser E&O insurance. Since you drive to the appraisal location, you also need business auto insurance.
- Errors & Omissions: Appraiser E&O insurance is also referred to as professional liability, this policy pays to defend you when a customer alleges you made an error or gave bad advice. It also pays any required settlement costs that result from a lawsuit.
- Business Auto: Covers driving accidents in the event you cause an accident on the road or back into another vehicle in a parking lot or driveway. It pays costs to repair your vehicles as well as another person’s property. If you use personal vehicles, make sure you have hired and non-owned auto insurance in place as well. Everyday driver policies won’t pay claims if a vehicle was used for business purposes.
- Cyber liability: This is crucial if you store sensitive client information. It assures you abide by state notification laws, pays for investigations, and covers expenses that a third-party accumulates when your files are breached.
- General Liability: This is typically thought of as a slip and fall policy. In addition to that, it also covers any damage you cause to an individual or businesses’ property while performing services.
How Much Does Real Estate Appraiser Insurance Cost?
Calculating insurance costs for real estate appraisers varies from company to company. They each have a unique set of insurance requirements, but most underwriters want to review your experience, past claims history, and what types of appraisals you offer. You can calculate insurance costs including E&O insurance cost by filling out our online application today.