How Much Does Home Inspector Business Insurance Cost?
Your home inspector business has unique needs, so it makes sense that your quote for errors and omissions (E&O) and general liability (GL) coverage will be tailored to your business. So, while most home inspector insurance policies cost between $1,000 and $2,500, you won't really know the true price of your policy until you get a quote.
But what factors contribute to your annual rate, or insurance premium? How do underwriters determine what they charge? While each insurance company is slightly different, here are the common factors in determining how much your home inspector business insurance costs.
When insuring your home inspection business, you get what you pay for. The less you pay, the less you likely receive. Lower prices often mean less coverage, minimal customer service, and poor claims handling. So if you receive a quote that seems like a bargain, investigate what may be cutting costs.
The most impactful factor in deciding your home inspector insurance cost is the amount of coverage you choose, including your limits, deductible, and endorsements. Insurance limits represent the total dollar amount your insurance company can pay toward your covered claims in a given policy period. You have two limits: your occurrence limit, which is the maximum amount the insurance company will pay per claim, and your aggregate limit, which is the maximum amount the insurance company will pay during the policy period. The higher the limits, the higher your home inspector insurance cost.
Your deductible represents the maximum amount you pay the insurance carrier for defense and potential settlement for each claim. The higher your deductible, the lower your annual insurance premium. However, when facing claims, having a lower deductible often leads to more savings overall. Additionally, we offer many incentives that can lower your deductible in the case of a claim, such as the Contract Discount, the Diminishing Deductible, and the Early Reporting Discount.
Lastly, an endorsement is a form that either changes or adds coverage to your insurance policy. Most home inspection insurance policies exclude additional services, like mold or pool and spa inspections. Thus, the insurance company will not offer coverage for those additional services without an endorsement. If you perform additional services or want defense and payout help for claims involving additional services, you may wish to override an existing policy exclusion with an endorsement. Your home inspector insurance cost increases anywhere from $50 annually to several hundred dollars annually depending on the types of and numbers of endorsements you add to your policy. Keep in mind that we do offer a discount if you purchase a bundle of endorsements.
The more homes you inspect, and the more expensive the properties, the higher your risk. This risk, or increased potential for claim expenses, is referred to as "exposure" in the insurance industry. If you have greater exposure than the typical inspector, your annual home inspector insurance cost, or premium, will be higher to account for the additional risk.
When deciding how much your home inspector business insurance will cost, insurers consider your prior claims history. For example, an inspector who has multiple claims can expect their insurance premium to cost more than one who has few claims.
However, just how much your past claims impact you isn't black-and-white. Many insurers will research your past claims to understand the circumstances involved. Whether you were at fault, how you cooperated with the claims team, and how much the claim cost are some considerations that may affect your premium.
State Insurance Requirements
Where you inspect also determines how much your home inspector business insurance costs. States with licensing requirements often have minimum insurance requirements, too. Thankfully, your broker will know what to add to make sure you're compliant.
If you're inspecting in multiple states, tell your broker which states. It won’t typically increase your home inspector insurance cost, but it will allow our brokers to ensure that you have the required coverage for all the states you work in.