Real estate appraiser provides an objective evaluation on the value of a property. Someone might want an appraisal if they’re selling, refinancing, or remodeling a property. Clients also get appraisals for tax assessments, legal matters and lease negotiations.
You might not think someone could sue you for a real estate appraisal, but you would be incorrect. Homeowners have a lot of emotional investment in their home, and they often overestimate how much their property is worth. If you give a lower assessment than they were expecting, it impacts their financial outlook. They could decide to sue. This is when you realize you need appraiser E&O insurance.
- Top 5 Providers of Appraiser E&O Insurance
- What is Appraiser E&O Insurance?
- Who Needs Appraiser E&O Insurance?
- What does Appraiser E&O Cover?
- How Much does Appraiser E&O Insurance Cost?
Top 5 Providers of Appraiser E&O Insurance
All of these recommendations have policies and experience specifically for appraiser E&O insurance. Should you decide to go with a professional liability policy that is more general in nature, please see “Best Professional Liability Insurance Companies for Small Business.”
- CoverWallet: Best for Comparing Online Quotes
- OREP: Best for Affordable Coverage
- RealCare insurance: Best for Comprehensive Coverage
- LIA: Best for Experienced Appraisers
- McGowan: Best for Self-Select Policies
CoverWallet: Best for Comparing Online Quotes
CoverWallet, an online commercial insurance broker, can take your information and then recommend a professional liability for you from up to three companies.
Their online quoting system is very simple and quick. After entering your information, a little box spins and then you are presented with quotes less than a minute later. It’s definitely worth a look.
If you are looking for a cheap appraiser E&O policy, working with CoverWallet can be a good option since you need to compare several E&O quotes to choose the cheapest one. CoverWallet will be able to provide you with several quotes in one place after processing your information since they are a digital broker and they work with several companies.
OREP: Best for Affordable Coverage
OREP (Organization of Real Estate Professionals) offers E&O Appraiser insurance for about $483 annually. Generally, if you can get insurance through a career organization, it’s a good idea because they often have discounts or group rates.
OREP also has excellent customer service, and most reviews reflect that. The website also has a library of useful information.
If you would like a quote from OREP, call them at (888) 347-5273.
RealCare insurance: Best for Comprehensive Coverage
RealCare insurance now offers insurance for 47 states (except NY, AK, and LA). They’ve paired with Navigators Insurance Company. They work with independent insurance agents to offer products specifically for real estate professionals.
When you pay with a credit card, you can have a binder in your hand in minutes.
They offer security incident coverage, loss of earnings, and reputation protection.
LIA: Best for Experienced Appraisers
LIA has been providing errors and omissions insurance since 1978. They won’t insure you as a residential appraiser unless you have two years of experience and they won’t insure you for a policy that combines residential and commercial appraisals unless you have three years of experience.
They offer legal assistance to help you prevent small problems from turning into lawsuits. They have 125 years of combined experience in the appraisal E&O field, so they know what they’re talking about.
To receive a quote from them, you must fill out an application listing your professional associations and your license number and they will be happy to get back to you.
McGowan: Best for Self-Select Policies
McGowan insures all sorts of appraisers: real estate appraisers, residential appraisers, commercial appraisers and even trainees as long as they have passed their exam.
They have up to $1 million in coverage and provide reimbursement of expenses, disciplinary action defense, subpoena assistance, and discrimination coverage.
They are a little old school, in that you have to fill out the application and then mail it to them. If you click on your state, it will take you to the application. On the application is an estimate of how much you’ll pay for what limits. The table below is for Oregon.
What is Appraiser E&O Insurance?
Errors and omissions (E&O) insurance is also known as professional liability insurance. Errors and omissions insurance will protect you in case of any mistakes or failure to perform services. For more information on this, see “What is Professional Liability Insurance? And its cost?”
Who Needs Appraiser E&O Insurance?
Even if you work for a real estate firm that has their own E&O insurance, it’s a good idea to have your own insurance. The company you work for has a policy which has to cover all of their appraisers, which may not be adequate. The company is protecting its own interests, not yours. What if your company suddenly closes? Your E&O coverage will lapse, which could spell financial disaster if someone sues.
What does Appraiser E&O Cover?
Your policy should cover you in case of:
- Missed deadlines
Anyone can make a mistake. Misfiling paperwork or hitting the wrong key on your computer could cost clients thousands of dollars. E&O insurance should cover your court costs, legal fees, and settlement costs.
What doesn’t It Cover?
Any fraud or white collar crime you commit is not covered. It doesn’t cover property damage, physical injuries, or vehicles—those are covered under different types of policies.
How Much does Appraiser E&O Insurance Cost?
Regardless of policy limits, Insureon says the median annual cost of errors and omissions insurance to be about $60 a month. That similar to what most professions pay for E&O insurance.
When we get quotes online from the top 5 providers above, appraiser E&O insurance costs are in the range of $500-$600 a year, except that Hiscox‘s quote is $201 a month.
As you see, costs vary significantly from different companies, you need to shop around to compare quotes from several companies. Working with a broker like CoverWallet or Simply Business or commercialinsurance.net is a good way to get several quotes more conveniently since they are digital brokers and they work with several companies. After taking your information, they are able to provide you with several quotes from these companies. Be sure to shop around and compare quotes to get the cheapest one for you.
What Benefits should I Consider When Purchasing Appraiser E&O Insurance?
Some states require you to have errors and omissions insurance. If you work for a company, they probably have some kind of errors and omissions insurance. However, you should be aware that this is for all the professionals in the office. One lawsuit could potentially wipe that out.
If you’re an independent contractor, you’ll need your own errors and omissions insurance. Even if your state doesn’t require it, you should protect yourself with a basic policy.
You take your job seriously as a real estate appraiser. Protect yourself and your business by purchasing errors and omissions insurance. Odds are, you’ll never need it, but if you do you’ll be very glad you have it.