Tuesday, September 14, 2010

Certain Underwriters at Lloyd's Stop Insuring Real Estate Appraisers

Agents for major insurance provider Lloyd's have begun giving notice to many appraisers informing them that their E&O policies will not be renewed after mid-November 2010.  According to the notices of non-renewal, the underwriting group at Lloyd's who covered them has decided to stop insuring real estate appraisers.  This turn of events is not unexpected.  Some carriers have sustained very heavy financial losses in connection with appraiser E&O claims.  This is likely the case with the underwriting group at Lloyd's.  The claims environment for appraisers does not appear to be improving.  In addition, a few carriers in the past have taken the approach of jumping in and out of the insurance market for appraisers depending on year-to-year results.  Unfortunately, this approach sometimes leaves the insured appraisers stranded and needing to shop for a new carrier.

The key issue for appraisers left stranded by Lloyd's will be to assure that claims which might arise regarding appraisals performed while they had coverage with Lloyd's will be covered by their new insurance carrier.  To accomplish this, appraisers need to make sure that their "retroactive date" or "prior acts date" (equivalent terms) goes back to the same date as in their non-renewed policy.  In the present claims environment, there are also some very important considerations that appraisers should give to relevant policy provisions and exclusions.  These points are covered in an advisory for READI members in the resources section of readimember.org.

If you have questions about obtaining new coverage or wish to apply for coverage, appraisers may contact this blog's sponsor LIA Administrators & Insurance Servicesliability.com.  LIA has provided insurance to appraisers since 1977.  Its E&O program for appraisers is underwritten by carriers in the Liberty Mutual Group.
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Sunday, September 12, 2010

A Review of CoreLogic's New Independent Contractor Agreement Is Now Available from READI

READI members have asked for a review of CoreLogic’s new Independent Contractor Agreement that the company is requiring residential panel appraisers to accept. Please understand that I am not advising READI members whether they should or should not sign agreements such as this one. I am sharing below my legal and insurance concerns about the agreement, but appraisers must weigh for themselves the costs, benefits and risks of doing business under an agreement like this.

My review is of the version of CoreLogic’s Independent Contractor Agreement that existed on August 16, 2010. I found the agreement publicly available on the internet. CoreLogic may edit or revise the agreement over time. I anticipate that CoreLogic will probably make some changes because there are problems with the agreement that could lead to regulatory scrutiny. Regardless, a review of the present agreement is instructive for READI members considering this or similar agreements or who are involved in appraisal management.

In sum, my impressions are that the agreement is poorly drafted, may violate several states' AMC laws and regulations, and . . .

[This article is available to appraisers who are READI members in the reviews section of READI's site at readimember.org.

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