The following are real case studies from our home inspection insurance archives. To protect the insureds’ identities, all identifiable characteristics—including names, associations, and locations—have been altered or removed.
We’re here to set the record straight: It’s essential that clients sign your agreements before the inspection starts.
Perhaps it seems like just a formality. But in the world of insurance and risk management, that couldn’t be further from true. For one, talking to clients about the agreement before they sign creates an excellent customer service opportunity. Second, if a client signs late or not at all, they could argue they never agreed to your terms–or agreed under unfair conditions. In the event of a claim, the court could rule your agreement unenforceable, stripping it of all defensive power. That’s why, with most home inspector insurance policies, you need a signed contract before your home inspection to qualify for coverage. InspectorPro requires this, as do many states like Illinois.
Our goal is to be as transparent as possible about this requirement so home inspectors know exactly what’s expected of them. Even if you aren’t insured with us, we encourage you to continue reading. Since most (if not all) insurers require this, we want to share other inspectors’ experiences so you can learn from them and take precautions.
To illustrate the importance of signed contracts prior to inspections, let’s look at a few examples from our claims archive.
Example 1: The Six-Hour Delay
Four months after the home inspection, a client sued her inspector for failing to report evidence of pests throughout the property. The client had purchased the house, only to discover the feces, chewed wires, nests, and decaying carcasses of mice, rats, and birds–inside the range hood and kitchen cabinets, to name a few places. Her counsel described the inspection report as “laughably inadequate” and demanded $100,000 in compensation.
There were two problems: First, the home inspector didn’t have a pest endorsement. Luckily, his home inspection agreement outlined his standards of practice, which excluded identifying the presence of animals.
That’s where we find the bigger problem: He waited six hours after the home inspection was complete before getting his contract signed. As a result, the client could’ve claimed she thought a pest inspection was included in her service, and she didn’t learn otherwise until after the service had ended.
It doesn’t matter if this inspector used the strongest contract in the industry. Without a signature prior to service, he not only denied his client the good-faith window of agreeing to the terms of his scope and dispute resolution. He also lost the protections outlined in those terms and defied his insurance policy’s biggest requirement. Unfortunately, this resulted in loss of coverage for the claim.
Please note our intention is not to scare, intimidate, or make light of scenarios like these. The better you understand the signature requirement, the better we can prevent scenarios like this from happening. Sometimes, shedding light on the worst-case scenarios is the best way to stop them from repeating.
So, what happened in this inspector’s case?
When you’re insured with InspectorPro, our policy requires your clients to sign each home inspection agreement “before ‘inspection services’ are commenced.” See how we define an “inspection agreement” below (bold emphasis added):
Here’s what the inspector misunderstood: He believed he could get the contract signed anytime before the home inspection had ended. He assumed, as long as he hadn’t finished or released the report yet, he still had time to get a signed agreement–even six hours after leaving the property. Sadly, this is not the case.
What’s worse is that getting the contract signed six hours late wasn’t a one-time thing. He’d done the same thing hundreds of times before. If those other inspections turn into claims, too, he may find himself meeting a similar fate.
If you ever feel tempted to delay getting a home inspection agreement signed, remember the PRE in pre-inspection agreement. Make it a priority for clients to sign before you’ve set foot on the property. You might set a deadline for the day before. Whatever the case is, don’t start without a signed agreement.
Also, if the language in your insurance policy confuses you, don’t hesitate to call your insurer and ask for clarification. Our InspectorPro team is always willing to answer your questions, especially if it can prevent misunderstandings that affect your coverage.
Example 2: The Forgotten Follow-up
In our second example, a client was remodeling the home he’d purchased three months prior. While installing new floors in the primary bedroom, he noticed water pooling along one of the walls. The leak reactivated every time someone ran water from the primary and kitchen sinks. He gutted the kitchen and found the culprit: cracked and rusted cast iron pipes.
The client called his inspector and demanded to know why he hadn’t warned him about the leaking water inside his home. The inspector explained that his services are thorough but not technically exhaustive. It’s a limited, visual inspection that does not require predicting future conditions or reporting defects obscured from view, like a water leak inside the walls.
Additionally, he’d run the water fixtures for 30 minutes and didn’t observe any signs of leaking that day. The inspector had even reported the cast iron pipes and recommended scoping the drains to check their integrity.
Our claims team determined the inspector was not liable for the water leak. By all accounts, it looked like an easy solution.
It almost was. Except our claims team encountered an obstacle: The inspector never got the home inspection agreement signed. He meant to get a signed contract before the home inspection. Nevertheless, the client never followed through, and the inspector mistakenly released the report.
Unlike the previous case, the inspector didn’t have any other underlying coverage issues. Our claims team could issue a reservation of rights (ROR) letter. This allowed them to investigate while reserving the right to deny coverage later, if they discovered more coverage problems in the process.
In the end, our claims team issued a denial of liability letter on the inspector’s behalf. The upset client went quiet, and we closed the claim after 45 days of no response.
Delayed or forgotten signatures don’t always lead to denied coverage, as this claim shows. Our preference is to protect the home inspector to the furthest extent possible. Regardless, if he’d gotten the contract signed before the home inspection, he would’ve gained an opportunity to discuss his scope and set expectations much sooner. Perhaps the leak would’ve caught the client less off guard and encouraged a calmer resolution.
How? Imagine he’d sent his pre-home-inspection agreement three days before the appointment. The night before, the client still hadn’t signed it. So, the inspector called the client to check in. In doing so, he discovered that the client skimmed the contract but didn’t understand his exclusions. They talked over the phone about the scope, limitations, exclusions, and other important terms the client should know, and the client finally agreed to sign.
In theory, before the client started renovating, he would have been primed to understand that his inspector couldn’t see leaks inside the walls nor predict leaks that haven’t happened yet. Either way, the inspector would have had a set process that ensures a signed pre-inspection agreement, happier customers, easier-to-resolve claims, and no risk to his current coverage or future insurability.
How to Get a Signed Contract Before Every Home Inspection
At the end of the day, a solid, well-written, correctly signed contract by your side is a win for all parties involved.
Still, plenty of circumstances can get your way. You might have a client who forgets to check their email or answer the phone. Or, you might have an out-of-state buyer who’s difficult to get in touch with. Last-minute scheduling and contract-wary realtors add another level of stress.
Considering how essential your signed contract is to your coverage, future insurance, claims handling and outcomes, and customer service, we want to help you overcome obstacles like these. What can you do to get each home inspection agreement signed on-time, every time?
1. Plan ahead.
Starting with their first conversation, Travis McFarran of True Measure Home Inspections, LLC in Florida informs his clients about the pre-inspection signature requirement and why it’s important. If the client doesn’t sign his contract before the home inspection, then McFarran sends emails or texts to check in.
Follow his example and plan ahead. Consider using your inspection software to automate some of the reminders. The more time you give yourself, the more you can follow up with the client and offer gentle reminders without rushing. Their realtor might be willing to follow up about the signature on their end, as well.
If they delay signing, it could be because they don’t fully understand your agreement’s terms. So use these check-ins to set clear expectations and answer questions. Remind them that no signature means no home inspection.
2. Go digital.
Digital signatures could save you a great deal of time and stress, too. In addition to the convenience of getting a contract signed anytime, most electronic signature or e-signature software can also verify the signer’s identity and provide proof of signing.
Note, however, that some insurance providers don’t accept digital signatures as forms of consent. We delve into this more here.
3. Bring a physical copy to the inspection site.
What should you do if the client ignores your emails and still hasn’t signed by the inspection day?
As a last resort, bring your agreement to the inspection site. Whether it’s a printed copy or a tablet for them to sign, just make sure they sign prior to commencing your service. With this route, the most important thing is to give them plenty of time to read without pressure. Don’t hover and don’t rush them.
In fact, after you give them the contract, consider walking away or even sitting in your vehicle while they read and sign it. Offer to answer their questions. You may even offer to reschedule, if they feel uncomfortable signing that day or want more time to read it. Otherwise, the client may claim they signed under duress–that is, the contract was not in their interests, you pressured them into signing it, and otherwise, they would not have signed.
Just remember: It’s acceptable to get a signature onsite, as long as it’s a signed contract before your home inspection starts. Nevertheless, we advise this only as a last resort. The earlier the signature, the better. And, when following this route, don’t pressure the client, take photos, or do any other inspecting while you wait.
4. No signature? Reschedule or cancel.
Keep in mind that clients who consistently refuse to sign the pre-home-inspection agreement, argue about its terms, or ask you to change it could have unsavory intentions. In these cases, that buyer or seller may cause more trouble than the appointment’s worth.
If all else fails, we suggest rescheduling or even canceling the inspection. Have a plan, be polite, and use the trail of follow-up texts, calls, and emails to support you if the client pushes back.
Learn more about reasons to walk away from inspections in this article.
Use an agreement you can count on.
Before you perform any home inspection, save yourself the trouble and get your home inspection agreement signed. Not just sometimes. Not just when it’s convenient for your client. It’s your first line of defense, so get it signed before the inspection, 100 percent of the time. Remember: No signature, no inspection. Period.
Now that we’re done reviewing how to get signatures, ask yourself: When was the last time I reviewed my home inspection agreement, itself?
With InspectorPro insurance, that’s one less thing to worry about. All our insured home inspectors have access to our pre-inspection agreements. They’re completely free, customized to your state, and backed by over a decade of experience and research. Plus, if you get a claim while using one of our agreements, we’ll offer $1,000 off your errors and omissions (E&O) deductible.
Read about our agreements and request a copy here.