How an insurance company made us a better home inspection company

Today, I’m pulling back the curtain to share a major influence on what has made us the home inspection company we are today. It’s our previous insurance company.

Home Inspectors are a paranoid bunch

Back in 2004, when I first started learning how to do home inspections on my own, I had a voracious appetite for information. I attended a week-long home inspection school, read countless books on home inspections, and attended numerous seminars and home inspector meetings. All of that in addition to training in the field with my dad for many months, of course.

I quickly realized that home inspectors are a pretty paranoid group of people; they’re we’re always worried about getting sued. Experienced home inspectors told me to never use a moisture meter; if you use it in one area but don’t find moisture in another part of the home, you can get sued. The argument is that if you exceed your industry Standard of Practice (SOP) in ANY areas, you’ve set an expectation that you will exceed it in ALL areas, and you’ll dramatically increase your liability. Don’t crawl in tight crawl spaces. Avoid walking on roofs. Don’t traverse attic spaces. The list goes on.

Everywhere I turned, experienced home inspectors encouraged me to do the bare minimum to limit my liability. Oh, and they also encouraged defensive report writing. Be vague, recommend further inspection and evaluation of everything I could, and don’t ever say anything is acceptable… or I’m going to get sued.

And it all felt like a bunch of BS to me.

Unusual Liability Insurance

So here’s where insurance changed all of that. My dad was (and still is) a licensed Truth-in-Sale of Housing Evaluator for the City of Minneapolis. Minneapolis has some very unusual insurance requirements for its evaluators, and no insurance companies want to mess with this. So we were insured as both Truth-in-Housing Evaluators and home inspectors through a joint underwriting association. This is a shared insurance pool created by the state and funded by private insurers to cover high-risk stuff that regular insurers consider untouchable.

The downside to this program is that it’s terribly expensive. We get audited at the end of every year, and we pay for every single inspection we do. Each individual inspector has to have their own policy; there is no “company policy”. And we pay WAY more than what it ought to cost.

The positive side of this program is that it’s a zero-deductible policy. If we get 20 claims in a year, it doesn’t matter. The insurer can’t drop us, and rates might increase for our entire class, but not for any individual.

Back in the early 2000s, this created a safety net for me. I knew that no matter how good or how bad a job I did, a lawsuit would not affect my pocketbook, my insurance rates, or my insurability. I could whip through a home inspection in an hour, deliver a terrible report, and it wouldn’t matter. My insurance was crazy! But on the flip side of that coin, I knew that I could do all of those crazy things that other home inspectors told me not to do. I could go way above and beyond the Home Inspection Standards of Practice because I had a safety net.

Safety Net = More Risk-taking

Knowing I had a safety net,  I pushed the limits on how far I could go with a home inspection. And I did a lot of stupid stuff. I learned a lot of lessons the hard way, because I didn’t trust all of these paranoid home inspectors telling me to limit my risks. Here are a few lessons I was taught the easy way but insisted on learning the hard way:

• Don’t ever open a water valve.
• Don’t ever operate a boiler radiator valve.
• Don’t ever leave a bathroom with the tub filling.
• Don’t flood-test a tiled shower pan.
• Don’t reset a tripped circuit breaker.
• Don’t remove the blower fan on a furnace and crawl inside it to look for cracks in the heat exchanger. Ok, nobody ever told me that. But I’ve done it, and I’ve regretted it.
• Never walk on a wet wood roof.
• Never walk on a wet wood roof. This is a life safety issue that bears repeating. I’m lucky to be here.

But on the positive side, I gained confidence in exceeding Home Inspection Standards of Practice in every area that I could. I tried every new home inspection method that I could learn about. Some of them stuck, some of them didn’t… but it was never about trying to cover my butt. It was always about pushing the boundaries and providing a better home inspection to my clients.

Insurance Today

There are a few inspectors on my team who are licensed Truth-In-Housing Evaluators, and each one of them has the crazy underwriters insurance for those evaluations. But for Structure Tech as a whole, we have a traditional insurance policy through InspectorPro. I spent a decade making every possible mistake I could think of, and now I share these with my team and tell ’em to learn from my mistakes.