Working RE Home Inspector Magazine - Issue 21

Now Reaching Over 30,000 Inspectors in Print and Online—Get the latest news at workingre.com

Home Inspector Working RE

Winter/Spring 2023, Volume 21

INSPECTOR CLAIMS & RISK MANAGEMENT Home Inspector Convicted of Indecent Exposure Specialized Environment Testing Top 20 Home Inspection Mistakes I've Made

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his isn’t our first rodeo. When the market slows (and even when it doesn’t!), somebody always wants to blame the home inspector. That’s why you want a team with deep expertise in your corner. Specializing in home inspector insurance for over 20 years, OREP has built a network of attorneys who have been defending inspectors for decades.

OREP now offers its insureds PROFESSIONAL pre-claims assistance. We’re proud to announce our partnership with trial attorney Geoff Binney, one of the nation’s most experienced home inspector attorneys.

When you’re facing a claim or complaint, you don’t have to go it alone or put your future in the hands of insurance adjusters who roll over and pay meritless claims.

OREP Members enjoy professional support from Geoff Binney who provides pre-claims support and decisive response letters to shut down frivolous claims.

Trusted by over 11,000 Real Estate Professionals— Our business is defending you and your livelihood.

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Winter/Spring 2023, Vol 21

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From the Editor

Readers Respond

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Inspector Claims and Risk Management: An Inside Look

by Isaac Peck, Senior Broker at OREP.org

Home Inspector Convicted of Indecent Exposure

by Kendra Budd, Editor

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Specialized Environment Testing

by Dylan McIntosh, CIH

18

Rusted Metal Flue Pipe: The Science Behind Your Inspection

by Tom Feiza, Mr. Fix-it, Inc.

24 28 30 34 38 40

Top 20 Home Inspection Mistakes I’ve Made

by Reuben Saltzman, Structure Tech

How Robots Can Help Your Business

by Aaron Cockrell, SuperDroid Robots

How to Market Your Business to Real Estate Agents

by Kendra Budd, Editor

How to Make More Money as a Home Inspector

by Lauren Kelly, Marketing & Business Development Manager at HomeGauge

Do You Need E&O Insurance as a Home Inspector?

by Kassandra Jessup-Prater, RWS Insurance Services

Professional Marketplace Mission

Working RE Home Inspector magazine is published tri-annually to help home inspectors build their businesses, reduce their risk of liability and stay informed on important technology and industry issues.

Publisher

Isaac Peck: isaac@orep.org

Marketing & Design Manager Ariane Herwig: ariane@orep.org

Working RE 6353 El Cajon Blvd Suite 124- 605 Sa n Diego, CA 92115 (888) 347–5273 www.workingre.com

Editor Published by OREP Working RE is published by OREP, a leading provider of home inspector insurance nationwide. OREP has a low cost, broad coverage E&O and General Liability policy. Coverages available include radon, infrared, termite, pest/rodent, lead paint, mold, septic, and more. See inside front cover for more information or visit us online at OREP.org to get a quote today!

OREP Insurance Services, LLC. Calif. Lic. #0K99465

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Kendra Budd: kendra@orep.org

Graphic Design Associate Maria Cornelia: mj@orep.org Working RE Home Inspector is published tri-annually and mailed to home inspectors nationwide. The ads and specific mentions of any proprietar y products contained within are a service to readers and do not imply endorsement by Working RE. No claims, representations or guarantees are made or implied by their publication. The contents of this publication may not be reproduced either whole or in part without written consent.

From the Editor

The Slowdown is Here

Readers Respond

By Kendra Budd, Editor

Home Inspectors: Electrical Systems of Older Homes As electricians ourselves, we come across this issue daily. Many more appliances are in the home nowadays, especially with people wanting to install electric vehicle charging points. —James A.

Right now, home inspectors are faced with uncertainty in regards to their businesses. The pace of real estate transactions has slowed in most local markets and there is speculation that the United States is entering a recession. Inspectors are feeling it. This news has home inspectors scared that the ghosts of the past have come back to haunt them, with many afraid that we’ll have a repeat of the 2007–2008 housing crash. Whatever is coming down the road, I’m reminded of the quote by Robert Frost, “The only way out is through.”

With many home inspectors experiencing a slowdown in business, there is more time to adjust processes and explore new opportunities. Here are some things to consider.

Risk management is imperative for any home inspector to be aware of and now is a good time to make sure you have processes in place to protect your business. By being prepared for what can go wrong, you’ll know how to make it right—alleviating you from any potential lawsuits and the anxieties that come with it. This issue offers some practical tips on how to navigate the risks that you face and how to avoid common claims (See Inspector Claims and Risk Management: An Inside Look on pg. 6).

In an environment with less real estate transactions, it’s also time for home inspectors to consider ancillary services. Adding an ancillary service will help you stand out amongst other home inspectors while work is slow. For example, we’re seeing an influx in natural disasters all over the world—but especially here in the United States. Inspectors can consider broadening their horizons by also becoming a public disaster adjuster (See ATI Training on pg. 33). The bittersweet truth is that even though the real estate market is slow, disasters rarely take time off. This is just one of many additional services home inspectors can consider adding on. See Specialized Environmental Testing on pg. 14 for additional ideas.

Finally, home inspectors should consider obtaining reliable E&O insurance if they haven’t already. There are a multitude of benefits to getting E&O insurance, from protection against discrimination claims to claims of negligence—you need to be protected (See Do You Need E&O Insurance as a Home Inspector? pg. 38). In an environment where real estate prices start to decline, claims against home inspectors tend to increase. That makes it more important than ever to select an insurance provider that specializes in defending home inspectors.

For over 20 years, OREP has specialized in home inspector E&O/GL insurance and now offers professional claims support led by trial attorney Geoff Binney, who delivers pre-claims support and decisive response letters to shut down frivolous claims for all OREP Members.

Stay safe out there! WRE

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The oldest type of wiring system found in homes is called knob-and-tube, named for the insulating knobs and tubes that are used to run the wiring along and through the house framing. Knob-and-tube wiring was run as individual wires—one black hot wire and one white neutral wire—throughout the home. —SK Electrical Works

Electrical Receptacle Testers Demystified Author Victor Faggella has made an obvious error about operating three light testers. He says, “With an open ground, and reversed polarity, you will get no lights.” This is not true. The tester cannot identify reversed polarity unless the ground is also present to light the reversed polarity bulb. The tester will indicate an open ground but not reversed polarity. In fact, this is one of the shortcomings of a three-bulb tester. It can only indicate ONE problem at a time. Outlets that have multiple wiring problems will only be identified as having one by the three-light tester.

—Robert K. In Response to Robert K.—You know, you are correct.

Somehow when I wrote this, all I saw were LEDs and not neon bulbs. This was peer-reviewed, and something was missed. The neon bulbs will light with reversed polarity and only show the ground is open and not reversed polarity. Thanks for catching that.

—Victor G. Faggella, P.E. WRE

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Inspector Claims and Risk Management: An Inside Look

by Isaac Peck, Senior Broker at OREP.org

At OREP, we have the privilege of working with several thousand home inspectors every year—providing risk management, insurance, and liability advice to help inspectors stay out of trouble and, unavoidably, defending our inspectors when trouble comes.

While you and I may have never met, I know you work hard for a living and I know you do the best you can to provide a thorough, high-quality home inspection for your clients.

With that said, and at the risk of sounding like a wet blanket, this is America. There are more lawyers per capita in the United States than any other country in the world.

But perhaps more impactful than our society's litigious nature is the unique position home inspectors find themselves in with respect to liability and “blame.” The combination of unrealistic expectations of what a home inspector can detect, buyer’s remorse, and “wanting someone to blame-ism” when a home defect is discovered—all too often creates a per fect storm of unreasonable demands and inflated lawsuits against this noble profession.

Home inspectors are much more likely to receive a demand letter or a lawsuit than any other real estate professional—and most tradesmen or professional service providers generally.

A few days before Christmas last year, I had three claims against OREP home inspectors cross my desk in a single day! It’s not pretty, but it’s the truth. Risk is real.

Polybutylene Piping This one comes up several times a year. Polybutylene piping was a popular water supply pipe material used by builders from 1978 and 1995. Polybutylene was originally thought to last as long as copper. It is flexible and can be bent, which made it easier to install (and it was relatively inexpensive).

However, in the late 199 0 s a series of class action lawsuits were filed against Shell Oil Company (which supplied the polybutylene fittings) and other pipe manufacturers. In total, Shell paid over $1 billion to settle several class action lawsuits over the defective nature of polybutylene piping.

After a flurry of intense litigation, polybutylene is now widely regarded as a defective product and homes that still have the piping continue to experience sudden pipe bursts, leaks, and water damage.

Consequently, it’s more important for home inspectors (especially) to build in professional procedures, inspection processes, disclaimers, disclosures, and key contract clauses that will help them avoid claims and put them in the best possible position if a claimant does come knocking.

Home inspectors frequently mistake polybutylene piping for PEX, checking the PEX box in their home inspection report. Or, perhaps the home has been replumbed in specific areas (like the laundry room) with copper piping. Seeing copper piping in one area of the home, the home inspector might confidently report that the plumbing is copper.

Here are some practical tips on protecting yourself and staying out of trouble based on recent claims that have crossed my desk.

We have seen cases where all visible piping in a home was copper but the interior piping in the walls throughout the home was all polybutylene.

Isaac Peck is the Publisher of Working RE magazine and the Senior Broker and President of OREP.org, a leading provider of E&O insurance for savvy professionals in 49 states and DC. Over 11,000 real estate professionals trust OREP for their E&O. Isaac received his master’s degree in accounting at San Diego State University.

Reach Isaac at isaac@orep.org or (888) 347-5273.

CA License #4116465.

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Consequently, home inspectors are frequently blamed by new homeowners for failing to call out polybutylene piping. The argument is usually that the home inspector reported the piping as “PEX” or “copper,” but in reality, there was polybutylene piping and therefore the home inspector should pay for it. The cost to replace polybutylene piping with PEX or copper piping can run anywhere from $10,0 0 0 to $20,0 0 0.

Working RE Inspector Winter/Spring 2023

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7page 6 How to identify polybutylene piping: • It often has a stamp reading “PB2110” • It is most often a gray plastic, but can also be silver, blue, white, and black • It is usually ½” to 1” and is used only for water supply, not drainage or waste A good approach that I heard recently on how to handle this was from Ian Robertson, when we were chatting on his Inspector Toolbelt Talk podcast. Instead of reporting that the home has one type of pipe, Robertson reports something like this: The majority of piping that could be seen at the time of inspection was [PEX/copper/etc]. Other plumbing materials may be present but were not detected at the time of inspection.

This gives the home inspector a good hedge against this fairly common claim. Of course, you want to be on the lookout for polybutylene piping, checking all piping that protrudes from the wall (the water heater, kitchen, bathtubs, jacuzzi, etc.) and do your best to report it and protect your clients.

Attics Like Reuben Saltzman says (pg. 24), if you’re inspecting an attic and you can’t see what you’re stepping on, you don’t know what you’re stepping on! Be very careful about where you step/place your weight in an attic. Many home inspectors have a policy that they don’t walk where there’s no decking. That’s prudent. We’ve seen home inspectors step through ceilings and/or break rafters.

Perhaps more devastating (and expensive), is if you step on a sprinkler pipe and break it—like in a case I saw last year.

The home was a three-story condo/townhome and there was no water shutoff at the street. Water flooded the home from the attic down through all three stories for over a half hour before the fire department to shut off the water. In this type of case, even a strong and experienced defense team can’t save you. Restoration and dry-out expenses, tear-out, build-back, damage to property, and loss of use—you name it. The settlement for these claims can approach six figures.

Foundation and Decks These are two areas where it pays to slow down, follow a clear process, and perhaps take some extra training (if needed).

There’s quite a bit of science and “standards” that go into the proper construction of both decks and foundations.

Exterior decks can quickly become a safety issue for new homeowners and there’s a lot that goes into making sure a deck is properly constructed. Are the spindles spaced too wide? Are the deck posts grounded in cement? How is the attachment to the main home? Is the railing firm? Is there sufficient support and adequate use of strong-ties in the construction to ensure the deck’s structural integrity?

Some of these issues may not be expressly stated in your Standards of Practice, but if you’re going to inspect a home with a deck, I’d strongly advise taking some specific education

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around this subject. There’s a lot that goes into proper deck construction and while it’s not realistic to expect home inspectors to be deck experts, a little knowledge can go a long way towards helping you avoid claims and also keep your clients’ families safe.

Foundations are a similar situation, especially with wood, crawlspace stem, and “pier and beam” foundations. A little extra training on these systems is invaluable. It also pays to slow down in this area of the home. A home inspector who is rushing can easily overlook a missing joist or key structural support in the foundation. Depending on what’s missing or defective, this can be costly.

With foundations that have crawlspaces, if you do not inspect the entire crawlspace—don’t say that you did. It’s not uncommon for a home inspector to inspect a portion of the crawlspace and report an “all clear,” but face a claim when the uninspected crawlspace areas are found to have serious structural defects, mold, water damage, and so on. If you can’t access the entire crawlspace, state so clearly and disclaim it. There are a number of tools you can use to conduct thorough crawlspace inspections as well (See pg. 28).

Hold Harmless and Indemnification If you are using subcontractors at all, you should have an agreement that requires them to “indemnify” you for any errors they make in their services.

There are many different ways this can play out (depending on the type of subcontractor), but here are two examples: • Scenario #1: In addition to your home inspection, you offer ancillary services to your clients such as WDI/Termite inspections or Sewer Scoping inspections. Instead of per forming those inspections yourself (you might not have a pest license), you sub that work out to a pest inspector or a plumber. Since you’re smart, you verify that these professionals are carrying their own E&O insurance.

• Scenario #2: You have home inspectors working for you as independent contractors (1099) and in an effort to insulate yourself (and your insurance) from their mistakes, you prudently require them to carry their own E&O insurance.

In both of these scenarios, even if these other professionals are carrying insurance, you still need a separate agreement between you and the subcontractor that the subcontractor will indemnify you and hold you harmless for any errors that they make.

The reason for this is that your company is the one being hired by the homebuyer to perform the work. So, if something goes wrong, you are the one who is going to face a claim or receive the demand letter.

The fact that the subcontractor is carrying their own insurance policy means little if YOU are the one who is named in the lawsuit or demand letter. Neither your subcontractor or their

insurance will volunteer themselves in your defense. Without an indemnification agreement between the parties, the best you can hope for is to get your insurance company to argue with your subcontractor’s insurance company and try to get them to pay, but I wouldn’t bet on this approach. I’ve seen this happen often and recently. Indemnification agreements are incredibly common in other professions and home inspection firms should follow suit.

Here’s the moral of the story: If you are working with subcontractors in any capacity, then you need an indemnification agreement between you and them. This will allow you to easily push the liability for a subcontractor’s real or perceived errors onto them (rightfully so) and let them and their insurance handle the claim instead of you being the primary bag holder and face of the problem. (OREP provides drafts of Indemnification Agreements to its Members at no extra charge.)

Your Contract Your contract is one of the most important risk management and defense tools you have available to you. It sets expectations for your inspection and should clearly define what your home inspection includes and what it does not include.

If you don’t have a limitation of liability in your agreement, you need to URGENTLY add one to your agreement (unless it is prohibited in your state: NJ, MA). We recently defended a home inspector who was confidently texting his angry and demanding client that his contract was “iron-clad” and had been reviewed by a lawyer. You can imagine my surprise (and disbelief!) when, after reviewing it, I found he did not have a limitation of liability clause in his contract.

Key clauses you want in your inspection contract include: • Limitation of Liability (unless illegal in your state) • Statute of Limitations • Services/Inspections that are Excluded (this should be a long list) • Notice and Waiver clause • Confidentiality/Exclusivity clause • Broad Definition of Client • Attorney’s Fees (if applicable) If you don’t know what all of these clauses mean or stand for, I’d be happy to help.

To reiterate: your inspection contract is one of the most important tools you have to defend yourself. You should consult with a knowledgeable real estate attorney, or your E&O insurance provider if they have extensive experience in this space. (OREP provides attorney-reviewed drafts of Pre-Inspection Contracts to its Members at no extra charge.)

Report Demands, Get Help Experienced home inspectors are skilled at dealing with upset clients. Many inspectors handle these situations master-

fully—explaining to the demanding client that the home “defect” in question was not visible at the time of the inspection, outside the scope of the inspection, and/or that the inspector’s liability is limited to a refund of the inspection fee.

Some home inspectors even go above and beyond—endeavoring to “make it right” where possible and financially feasible.

While this level of personal claims handling is admirable, it is still imperative that you notify your insurance company of any threat, claim, or incident. The reason for this is if you fail to notify your insurance company, and then the issue develops into a full-blown claim six, 12, or 18 months later, your insurance company is likely to deny coverage and you’ll end up facing the claim out of your own pocket.

This happens for two reasons. First, by not notifying your insurance company, you have arguably disadvantaged the insurance carrier from potentially handling the issue earlier. And second, when you fill out your renewal application for insurance and represent that you have no knowledge or claims or “circumstances that might lead to a claim,” your insurance company now has ample grounds to argue that you lied on your application and use that as grounds for denial of your claim.

Here’s a stor y that ma kes the p oint. A home inspector performed a home inspection for a lawyer (speak of the devil), and shortly after moving in, the client/lawyer discovers minor water damage and mold on the floor behind a piece of furniture. The client then requests the home inspector’s insurance information so he can “make a claim,” but the inspector handles the matter himself, explaining to the client he’s not responsible for moving furniture and can only report on what he can see. The inspector does not notify his insurance company.

Months later, the home inspector subsequently renews his insurance with a different carrier, representing that he has no knowledge of any claims or “circumstances that could result in a claim.”

Then comes a formal demand letter from the attorney for over $500,000. The letter explains that extensive mold was discovered at the property and considerable remodel work was required. The property was unusable for months and the inhabitants all report significant “health problems” because of exposure to mold.

The home inspector’s new insurance carrier declines coverage, arguing that the home inspector clearly knew of this situation as they had received an email demand from this same claimant nearly a year ago—and had failed to disclose it when renewing their insurance. The home inspector was then, unfortunately, left to defend against a very significant claim without any insurance coverage.

Home inspectors often opt not to report threats or “incidents” page 10 8

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7page 9 because the inspector worries that by notifying the insurance carrier, their insurance rates will go up substantially. Who you have insurance with is definitely a key factor in how this is handled (see below), but setting that aside, failure to report can end up being much costlier in the end if the claim develops and you’re left to defend it alone.

Pick Your Insurance Carefully Reporting claims to your insurance company is important, but ultimately how that claim, threat, or circumstance is handled is one of the most important considerations when selecting who to insure with. There are a lot of options for inspectors today, including several “insurtechs” who are new to this space, but there are only a few companies who truly specialize in home inspector insurance and have been defending home inspectors for decades.

If you’re facing a complaint, demand letter, or claim, you don’t want your insurance adjuster or attorney to be new to the home inspector arena. We’ve seen cases where inexperienced adjusters quickly roll over and pay out $20,000 to $30,000 on a frivolous claim just to get it off their docket. This leaves the home inspector with a substantial “loss” on their record and leaves them either uninsurable or paying a very substantial premium for the next five years (when the claim will finally drop off their record).

Who you select as your risk management and insurance partner matters. In OREP’s case, we have a network of attorneys and claims adjusters with deep experience in the home inspection and real estate professions. For example, Geoff Binney, one of the nation’s foremost home inspector defense attorneys, has been defending home inspectors for over a decade.

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Mr. Binney currently runs OREP’s pre-claims program, advising our Members and responding to frivolous claims and demands from all over the U.S. Our approach is to respond aggressively to meritless claims against our Members before they turn into claims. We also don’t raise your insurance rates unless defense expenses are substantial or a settlement is paid out.

Other considerations for your insurance are: • E&O and GL: You want a policy that includes both Errors and Omissions (E&O) and General Liability (GL) in a single policy. Purchasing just a GL policy or just an E&O policy leaves you with substantial exposure.

• Look for a policy that covers you for ancillary exposures: mold, WDI/termite, radon, lead paint, drones, EIFS, pool and spa, carbon monoxide, and so on. Things like mold, radon and lead paint are often excluded in home inspectors’ policies under environmental exclusions and leave home inspectors with significant coverage gaps.

Conclusion This article certainly does not capture all the liability and risk factors that home inspectors face, but as a home inspector would say, it provides a good “representative sampling” of some of the latest issues I’ve seen recently. If you ever have any questions about your inspection contract, key disclaimers or disclosures, or home inspector insurance, please reach out to us at OREP—call (888) 347-5273 or visit OREP.org/inspectors.

We’ve been serving home inspectors with risk management information and E&O/GL insurance for over 20 years.

Stay safe out there! WRE

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Home Inspector Convicted of Indecent Exposure on the Job

by Kendra Budd, Editor

It might sound like a bad joke, but unfortunately, it’s true.

We’d all like to believe every home inspector acts with integrity and professionalism while on the job, however that isn’t always the case. Recently, a Michigan home inspector was convicted of “indecent exposure.” To make matters worse, the inspector committed the crime while performing a residential home inspection.

This case started a lively discussion and raised a series of questions for home inspectors and real estate professionals alike.

Should more states require home inspectors to get licensed?

What type of behavior should trigger a license revocation? For those states that don’t require licensing, what can be done to protect the consumer public?

The case also made local and national news and sent shockwaves through the community, especially since one of the victims of this case is arguably the most popular children’s toy— a Tickle Me Elmo doll.

Here’s what happened.

Tickled by Elmo On March 21st, 2021, 22–year–old Jaida Dodson hired Kevin Wayne VanLuven, 59, to inspect her home before a property sale. VanLuven arrived to inspect the Michigan home while Dodson and the rest of her family were offsite—leaving the inspector to per form his job alone. Toward the end of the inspection, Dodson got an alert on her phone that movement was detected in the nursery.

Dodson had installed cameras within her home, one of which was in her child’s bedroom. These cameras are often referred to as “nanny cams.” Their purpose is to not only keep a watchful eye on kids, but have also become an incredibly popular tool for parents to watch babysitters and nannies’ interactions with their children. Once the alert was sent to her phone, Dodson clicked on the video just to check how the inspection was progressing. What she saw instead horrified her.

Kendra Budd is the Editor of Working RE Magazine and Marketing Coordinator for OREP Insurance. She graduated with a BA in Theatre and English from Western Washington University, and with an MFA in Creative Writing from Full Sail University. She is currently based in Seattle, WA.

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According to court documents, “When Ms. Dodson opened the application, she observed the inspector walk into one child’s room, take a Tickle Me Elmo doll from the tent inside, and appear to unzip his pants and masturbate himself using the Tickle Me Elmo doll.” After he was finished with the toy, VanLuven then placed the doll back in its original spot.

Dodson, shocked and disgusted by seeing the inspector pleasure himself with her own child’s toy, quickly dialed 911 and saved the video for law enforcement.

“What if he had an STD and our son played with that? What if we didn’t know? We have a toddler and a newborn baby too,” Dodson said. “There’s nothing [worse] than when somebody comes to your home and you trust them to do a job and they go do something like that in your child’s bedroom,” Dodson stated to WDIV in 2021.

Sheriff’s deputies confronted VanLuven shortly after the call, who claimed to only have moved the doll to inspect an electrical outlet located behind it. Officers explained to VanLuven that there was a camera hidden in the nursery which showed him taking the doll toward the closet of the bedroom and committing the vile act with it.

Now caught, the inspector allegedly apologized profusely and all but admitted to committing the offense.

Home inspectors have raised questions about the legality of the nanny cam due to privacy issues. However, it was well within the legal rights of the homeowners to install and use their security device—even if its function was to watch their children, not the home inspector. In all 50 states, it is currently legal to make a video recording in your home without the consent of those being recorded. In fact, even if it wasn’t legal, VanLuven could have still been charged for performing the act at all.

VanLuven was charged with aggravated indecent exposure and malicious destruction of property. A judge also ordered that the inspector undergo a mental health evaluation, and that he

be banned from being alone on residential properties he did not own himself. He faced up to two years in prison and a $2,000 fine.

Sentencing Despite making major headlines in Michigan news outlets, VanLuven only had a one–day trial in October of 2022. The Oakland County Circuit Judge, Phyllis McMillen, ordered VanLuven, now 61, to serve 19 days in jail with 19 days of jail credit. Once released he will be on 18 months of probation.

McMillen also ordered the home inspector to continue with mental health treatment that he’d been receiving since the incident. He will be receiving this treatment until a therapist clinically discharges him.

required for inspectors to perform home inspections. Many inspectors choose to get these certifications to aid them in getting new clients, a promotion, or just adding skills to their resume. Meaning that if VanLuven had a certificate or not wouldn’t matter, he would still have every legal right to perform inspections despite his conviction. Whereas if a state requires licensing, this outcome could be different.

A license is given by a regulating body and grants permission for an inspector to perform home inspections. The licensure process certifies that a person petitioning for a license has met the minimum education qualifications required, and has demonstrated a mastery of skills required to perform home inspections successfully.

During sentencing, VanLuven apologized to the former homeowners, who have since sold their home. “To the family, it’s difficult to express how sincerely sorry I am for the trauma and violation…and disgust they must have felt. Not a day passes that I don’t feel remorse and regret for my criminal activity on that day,” said VanLuven in his statement. In fact, the inspector also apologized to his own family for the shame he put onto them. According to court documents, VanLuven intends to follow the sentence “to the letter.”

Licensed home inspectors can assure their clients that not only do they have the skills needed to inspect a home, but that those skills have been validated by a state Board. To obtain a license, a prospective home inspector must fulfill specific requirements outlined by their state. These requirements vary and may include completing an approved home inspection course, obtaining a certification, passing an exam, completing a certain amount of trainee hours, or any combination of these or other requirements.

A jury found VanLuven guilty of aggravated indecent exposure, but not guilty on the charge of malicious destruction of personal property less than $20 0. Although there was significant evidence to prove VanLuven committed indecent exposure, the same cannot be said for the second charge.

The state Board doesn’t just give out licenses, but they can easily take them away. If a home inspector commits a crime, or does something that jeopardizes the integrity and validity of a home inspection, like VanLuven’s, they risk having their license revoked. Often, it is impossible, or at the ver y least difficult, to then get one’s license back if it is revoked.

The jury found that since there was no proof in the form of DNA found on the Tickle Me Elmo doll, they could not charge VanLuven with destruction of property.

Licensed vs. Certified Home Inspectors Despite the outcome of this trial, VanLuven can still continue home inspections once he is released from prison. This is due to the fact that like many other states, Michigan does not require its home inspectors to be licensed. Cases like this one raise the question of whether or not home inspector licenses should be required in every state, or at the very least give states that don’t require licenses the power to reprimand home inspectors in some way.

Many inspectors choose to get certifications if their state doesn't require licensing. However, many certifications can’t be taken away even if an inspector commits a crime.

Final Thoughts If VanLuven was in one of the many states requiring a home inspector to obtain a license, he would likely never be able to perform a home inspection again. This case raises concerns within the home inspector profession that has been going on for quite some time. Should all states require home inspectors to obtain a license, or was this just a one-off incident?

The home inspection industry is one of integrity, expertise, and honesty. Instances like this paint the home inspection industry in a bad light, which is disheartening to those who take their profession seriously. States that do not require licensing may take this as a lesson and wonder whether or not certification is enough.

Certifications are granted to a student who has completed either an in-person or online course (or series of courses). Once an inspector has done the required work, a certificate will be sent to them. Certification offers proof of learning, completion of course knowledge, the passing of an exam, and/or verification of skills.

As a lesson for home inspectors generally, this is also a great reminder to per form your home inspection as if there is a nanny cam watching you perform your job. While this is one of the first incidents involving something like “indecent exposure,” home inspectors have previously been accused of rifling through homeowners’ belongings and even theft after being caught on nanny cams. You never know if you’re being watched while performing your inspection.

However, certifications are earned voluntarily and are not

Stay safe out there. WRE

Working RE Inspector Winter/Spring 2023 13

Specialized Environment Testing: A Profitable Way to Increased Revenue

by Dylan McIntosh, CIH

Although colder months usually mean a dip in home sales,

there’s more to the current situation in the home inspection market than just the weather. With mortgage rates climbing to over six percent, many are feeling the effects of inflation and fear the onset of a recession. According to the National Association of Realtors, as of July 2022, existing home sales were down six percent from June and down 20 percent from a year ago. As the housing market shifts, home inspectors need to adapt. With fewer homes selling, getting more money per job is essential.

Home inspectors can increase their revenue per job by adding more services to their offering. Environmental services like mold, indoor air quality, radon, meth, asbestos, and lead testing can increase your profit margin while providing homebuyers peace of mind about their new purchase.

Mold & Indoor Air Quality Testing First, let’s look at mold testing. Mold is everywhere, seen and unseen. No matter what state you reside in, there’s mold. Even in the driest of climates, a water leak can lead to a mold issue inside a home. These issues are often not visible to the naked eye, but can still cause health and financial problems for homeowners. Finding a mold issue during the home inspection can help homebuyers avoid costly remediation down the road.

However, the perceived high cost and stagnate nature of mold testing technology has made mold testing seem out of reach for most home inspectors. It is true that traditional methods require costly and bulky equipment and expensive lab analysis.

But new advances in artificial intelligence are also revolutionizing the mold testing industry. With this technology, home inspectors can get started for less than $99 and carry out professional mold inspections with very little training.

The most common mold test during a home inspection is testing what’s in the air using air sample cassettes and an air Dylan McIntosh is a Certified Industrial Hygienist (CIH) who has performed hundreds of mold assessments in residential, commercial, and healthcare settings.

He is also a PAACB Certified Spore Analyst who has analyzed thousands of airborne and surface mold samples. Dylan is currently the Product Manager for Sporecyte, the leading AI platform for fungal analysis.

14 Working RE Inspector Winter/Spring 2023

pump. Testing the air can help identify if there are possible mold issues affecting the indoor air quality of a home. Another sample type is surface, which can be collected using a swab or tape. Surface testing can directly identify if discoloration on building materials is mold or not. No matter which sample you choose, it will need to be analyzed by a mold lab.

Historically, this analysis has been done by lab technicians looking through a microscope to identify mold spores. However, only 30 percent of mold samples are reviewed because of the time it takes to review a whole slide manually by a human. Now laboratories, such as Sporecyte, are utilizing the power of artificial intelligence (AI) to perform these analyses.

The AI analyzes 10 0 percent of the slide while providing more efficient and accurate results. Then, the results are sent to a certified mycologist to confirm the results. By using AI, labs are able to turn around better results, quicker, and at a lower cost.

This advance in technology is making mold testing more accessible and affordable for home inspectors and homebuyers.

With the ability to get started for less than $10 0, you can instantly begin reaping the benefits. According to Forbes, homebuyers are paying, on average, $650 for a mold inspection.

Don Harding, a home inspector in Utah, charges $295 for most of his mold inspections. With AI-powered mold testing and just 15 extra minutes at each inspection, he can bring in an average of $185 additional revenue per inspection.

Radon Testing Next, let’s look at radon. It is estimated that as many as eight million homes have elevated radon levels, especially states like Alaska, South Dakota, Pennsylvania, Ohio, Washington, Kentucky, and Montana, which have particularly high radon levels. However, it is present in most states, as only five have low radon levels. Radon is a naturally occurring radioactive gas that is odorless, tasteless, and colorless. It’s worrying because it has no immediate symptoms, but it is the second-leading page 16 8

7page 14 cause of lung cancer. Radon levels in one home can be completely different from the home next door, so the only reliable way to know if it is a problem or not is to test for it.

Organizations like the United States Environmental Protection Agency (EPA), Surgeon General, and American Lung Association all recommend having homes tested for radon. Testing is crucial because it is the only way for a homeowner or buyer to know if there is radon in their home.

Regarding radon testing, starting with education is best, as each state has specific stipulations. Twenty-five states have certification laws for radon. However, educating yourself on best practices is still good, even if your state doesn’t have particular stipulations. Home inspectors can look to organizations like the National Radon Safety Board, the American Society of Home Inspectors (ASHI), the International Association of Certified Home Inspectors (InterNACHI), or others for radon courses and certification programs.

Next is deciding on what type of equipment to invest in. There are two primary devices, passive and active. Many home inspectors prefer active devices over passive ones. However, passive devices are much less expensive. However, any expenses you incur from equipment and training can quickly be recouped after just a few radon inspections. A radon inspection can range from $145 to $70 0, with an average inspection costing $411.

Clandestine Drug Testing The Substance Abuse and Mental Health Administration estimates that approximately 1.6 million Americans used meth in 2017. If someone has used or produced methamphetamines in a home, those areas are left contaminated with potentially dangerous levels of toxic chemicals. If exposed, those living in a contaminated home can experience a runny nose, throat irritation, headaches, dizziness, nausea, vomiting, confusion, and breathing difficulties.

Meth remediation can cost upwards of $30,0 0 0. It’s best to identify the problem before a home is purchased. During an inspection, there are a few signs that a home inspector can look for in order to recommend a meth test. Those signs include yellow discoloration on walls, drains, sinks, and showers; blue discoloration on the valves of propane tanks and fire extinguishers, and removed or taped-off fire detectors. Although meth itself is odorless, its ingredients can often have pungent odors of solvent, paint thinner, or ammonia.

To test for methamphetamine contaminates, a home inspector can choose to do the sample utilizing immunoassay (semi-quantitative onsite results), laboratory analysis (numerical, processed at a laboratory), or a combination thereof. All sorts of testing kits can be found online.

There is also a misconception that all meth labs and properties need to be demolished because decontamination isn’t possible. While that may have been true for many years, it’s not today. Many of these homes can be saved thanks to advances 16 Working RE Inspector Winter/Spring 2023

in science and technology. In fact, 9 0 percent of contaminated properties can be decontaminated successfully.

Asbestos Testing Asbestos is a natural mineral fiber found in many common building materials. It is strong, durable, and water-resistant.

When the microscopic fibers from asbestos are released into the air, they are hazardous. While asbestos, in general, is dangerous, if these materials are in good condition and are not disturbed or touched, they are safe. Before doing any repairs or renovations, doing an asbestos test is crucial.

Testing includes a visual inspection, inventory of the suspected materials, bulk sample extraction, and laboratory analysis.

An onsite inspection will usually take a couple of hours, and results can be returned in as little as three days, depending on the lab. The EPA requires that anyone performing asbestos testing be adequately trained. Some states also have regulations requiring licensing for asbestos testing, so be sure to research the requirements where you live first. There are several EPA–approved programs if your state does not provide one. In this training, you’ll learn about the proper methods for doing testing and the equipment needed. After you’re properly trained, you can start offering asbestos testing to your clients for upwards of $79 0, according to Home Advisor.

Lead Testing After 1978 the United States government banned consumer use of lead-containing paint. But before 1978, lead-based paint was ver y common. Many homes built at this time contained lead-based paint.

Lead can be found in more areas of the home, like soil, dust, plumbing, and tap water. Lead is a poisonous metal that presents a health hazard to everyone, especially children.

A lead inspection can be performed with an x-ray fluorescence machine, a lab test of paint samples, sur face dust tests, or a visual inspection. To do any of these tests, you’ll need to be trained appropriately. Similar to asbestos, some states also require licensing before conducting lead inspections. The International Association of Certified Home Inspectors offers either a six-hour learn-at-your-own-pace course or a 2-hour quick and easy course to become lead-safe certified.

There are three types of EPA–approved lead testing kits, the 3M™ LeadCheck™, D-Lead®, and the state of Massachusetts lead test kits. Depending on which kit you choose, the cost could be anywhere from $12 to $220. Depending on the cost of the kit you select will determine how much you want to charge for a lead inspection. According to Home Advisor, inspections can range on average from $238 to $437.

Making the Sale Now you may be concerned that if you start performing any of these tests and inspections, an unfavorable result could impact the sale of a home. This can seem daunting, with real estate agents being a primar y source of referrals. However, these

tests and inspections are essential for the buyers’ finances and health. A home inspector’s job is to ensure that any property being sold is up to code and safe to inhabit. These tests allow you to do just that.

not be important to them. With the median home price across the nation near $4 4 0,0 0 0, an additional few hundred dollars during the inspection could be just the thing that protects the most important purchase and people in their life.

Making sure a home is safe should always be the number one priority. For instance, if mold is discovered during an inspection, it doesn’t mean that the house is uninhabitable, and the buyer needs to move on. It’s quite the opposite. A mold inspection helps homebuyers discover a problem before it becomes a bigger problem. For example, the test can help locate an unidentified water leak. The agent can bring this issue up to the seller’s agent and get a concession to fix the issue. A concession can be written up for any environmental issue, and the issue can be fixed before a buyer moves in.

Prepare for the High Season Now is the time to prepare for the upcoming spring busy season by adding services, testing the waters, and getting educated. Pick one or two of these environmental services to get started with. If your business has slowed during this time like many inspectors, now is a good time to get any training done. Having a quick call with your insurance agent is also recommended. They can check for gaps in your coverage before starting one of these tests. Adding the appropriate insurance might cost a little extra, but it is essential to protect your business. Before you know it, you’ll be ready to start offering the service and making more money on many of your inspections.

Another aspect of making the sale is encouraging homebuyers to add these services to their inspection, even when paying higher interest rates for the home. The more you know about these services, the better you’ll be at discussing the benefits with homebuyers. As mentioned before, the safety of a home is your number one priority, and it will be with the homebuyers as well. Knowing about anything that can adversely affect their health and the health of their family members will never

Increasing your profit margin with environmental services like mold, indoor air quality, radon, meth, asbestos, and lead testing takes a bit of effort in the beginning, but you’ll start reaping the benefits before you know it. By spring, you’ll be an expert. WRE

Working RE Inspector Winter/Spring 2023 17

Rusted Metal Flue Pipe: The Science Behind Your Inspection

by Tom Feiza, Mr. Fix-It, Inc. HowToOperateYourHome.com

Holes in metal flue pipes that extend from gas appliances to a

Figure 1: Signs of Condensation

chimney can create a hazard if they fail. They may also indicate significant gas appliance and home performance issues. What is the science behind the stained, rusty metal flue pipes? Why did they fail? Why does a home inspector care?

Problems Galore Figure 1 shows telltale signs of moisture issues on two metal flue pipes from gas appliances to a masonry chimney. You can see stains and drips from moisture. There are pinholes in the metal flue and extensive rust. Pinholes show up on the outside of a metal flue pipe as slightly tan, white, or rust-colored.

These flue pipes are failing. If you look closely, you can see the lower pipe is newer but still showing signs of stains and rust.

I believe a severely corroded metal flue pipe was replaced but the draft and condensation problem causing the corrosion was not corrected.

Figure 2: Burn marks, rust, melted plastic, or melted foam insulation

The science? The system is not properly removing the products of combustion with adequate flow. The natural “draft” of the chimney and hot combustion gas is not working. It is not venting properly. The flow of combustion gas is slowed and it cools. Combustion products contain lots of moisture. As the combustion gas is cooled below the dew point temperature, moisture forms inside the metal flue. The moisture is mildly acidic from the products of combustion. The acidic water stains and rusts through the galvanized coating and through the metal. This is a hazard all inspectors should be concerned with—a failing flue pipe and possible backdrafting of combustion products into a home.

Signs of Condensation The products of gas combustion should stay warm enough to flow up the chimney without condensation. Watch for signs of poor draft of combustion gas, such as condensation and rust on the metal flue pipe from the appliance to the chimney (See Figure 2). Burn marks, rust, melted plastic, or melted foam insulation on pipes at a draft diverter are sure signs of backdrafting (See Figure 3; pg. 18 and Figure 4, pg 20).

Figure 3: Gas Water Heater with Signs of Backdrafting

page 20 8

18 Working RE Inspector Winter/Spring 2023

7page 18 Although it is hard to see on the outside of the metal pipe, Figure 2 is a severely rusted flue pipe on the inside. If you look closely, you can see rust holes through the elbow joints and along the horizontal run. The little tan spots on the exterior surface are actually holes through the metal flue. This metal pipe has failed and is about to fall apart. When it leaks or falls apart, combustion products are dumped in the home.

A Prime Candidate for Rust Look at the gas water heater in Figure 5. A long, low-slope flue pipe extends back from the water heater, over the crawl space, and all the way to the masonry chimney. Immediately you’ll see red flags: Does the flue pipe have the proper pitch? Is the flue pipe too long for the height of the chimney? Could the chimney be blocked? There are also deposits below the draft diverter on top of the water heater.

I photographed Figure 6 of that same water heater flue pipe, near the masonry chimney in that crawl space. Notice a dip in the slope of the flue pipe, patched with duct tape. (Too often we see duct tape, “the handyman’s secret weapon,” at the site of a defect). Condensation has also created rust holes and metal failure.

For this water heater, the metal flue pipe run was too long, the slope was inadequate, and the chimney was not high enough for the horizontal run. The products of gas combustion did not flow up the chimney. Instead, these moisture-laden products cooled in the metal flue, causing water condensation and damage to the metal.

Related Issues due to Poor Design Even without a complete evaluation of the chimney, flue pipe, and BTU of a gas appliance, we can still understand the problem. Where combustion gases don’t flow properly, they cool in the flue pipe, and condensation and rust occur over time.

Figure 8 shows holes in the back of a boiler combustion gas venting system. This boiler has a powered flue damper that may contribute to trapping combustion gas.

Burn marks and signs of backdrafting at the draft diverter are related issues in addition to a rusted flue pipe (See Figure 3, pg 18) shows related issues. In addition to a rusted flue pipe, you may see signs of backdrafting at the draft diverter and burn marks near the gas burner. A lack of combustion air or negative pressure in a home can also cause backdrafting and rust.

Negative pressure may be due to a large-volume kitchen fan or even a clothes dryer in a very tight home. Oversized chimney flues are another potential source of draft issues.

Oversized Chimneys: Often a gas water heater is “orphaned” in a masonry chimney when a naturally vented gas furnace is updated to a direct vent furnace. The flue gas/heat from the gas furnace is removed from the chimney making the water heater an orphan.

The gas water heater combustion products do not contain

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Figure 4: Chimney—Oversized Flue, Water Heater

Figure 5: Long Low Slope Flue Pipe

enough heat to warm the masonry chimney and poor draft or backdrafting occurs; this is shown in Figure 4. Condensed moisture will damage the inside of the masonry chimney, damage the chimney brick structure, and rust the metal flue pipe.

An oversized chimney is corrected by adding a liner to the masonry chimney, as shown Chimney—Oversized Flue Repair

Figure 8: Holes in Boiler Flue

Figure 6: Extensive Corrosion

Figure 9: 85% Stains, Leaks From Flue

(See Figure 7). The liner is typically a thin flexible metal that can be easily heated by the products of combustion from a gas water heater. Once the air inside the thin metal is warmed, a draft occurs. With a small metal liner, the full masonr y chimney tile does not need to be heated.

Mid-Efficiency Furnaces (85%) Issues: Rusted metal flue pipes can also be a problem on 85% furnaces if they are not venting properly. The fan on an 85% furnace is designed to deliver the products of combustion to a chimney where they should flow naturally up the chimney.

Figure 9 shows a close-up of the stains on the draft fan housing. Figure 10 (pg 22) shows an 85% furnace with leaks/stains from the metal flue pipe running down and over the draft fan. The furnace is not drafting properly. There should never be stains or rust on the metal flue of an 85% furnace.

Figure 7: Chimney—Oversized Flue Repair

You should note the metal flue pipe just above the cabinet/fan is new—someone replaced the rusty flue pipe but may not have page 22 8 Working RE Inspector Winter/Spring 2023 21

7page 21 corrected the draft issue. The issue should be noted as a possible failure to draft properly that needs further investigation.

The Takeaway: Rust and condensation on the metal flue pipes of gas appliances indicate improper drafting of combustion products out of a home and up the chimney. You should describe this as a safety defect requiring further evaluation because the products of combustion leak into the home. Combustion products contain moisture, contaminates and possibly carbon monoxide.

A rusted, failing metal flue pipe is also a safety hazard because it may leak products of combustion into a home. While the signs of failure are readily visible to a good inspector, you don’t need to identify all the potential causes for poor drafting. Just warn your customer of the potential safety hazard. WRE Tom Feiza has been a professional home inspector since 1992 and has a degree in engineering. Through HowToOperateYourHome.com, he provides high-quality marketing materials, books for homeowners, and illustrations that help professional home inspectors educate their customers. Copyright © 2022 by Tom Feiza, Mr. Fix-It, Inc. Reproduced with permission.

Figure 10: 85% Furnace Leaks

22 Working RE Inspector Winter/Spring 2023

Visit HowToOperateYourHome.com (or visit htoyh.com) for more information about building science, books, articles, marketing, and illustrations for home inspectors. Contact Tom Feiza with questions and comments by email at (Tom@htoyh.com), or by phone (262) 303-4884.

Top 20 Home Inspection Mistakes I’ve Made

by Reuben Saltzman, Structure Tech

I’ve made more stupid mistakes than any other home inspector on the planet. At least, I’m pretty sure I have. As I sit here adding them up, I feel pretty confident with my claim to shame.

When I talk to new home inspectors, I often say, “always do this” or “never do that.” And then I follow these warnings with: “Ask me how I know.”

Figure 1: Look inside the dishwasher before running it

Today I’ll share some expensive, painful, and embarrassing lessons I’ve learned the hard way. Luckily, you get to learn them the easy way.

By the way, I’ve heard you should never speak in absolutes, but here goes.

1. Always Look Inside the Dishwasher before Running It I once started to run a dishwasher before looking through it, and I was very glad the listing agent was there. He stopped me and kindly removed the homeowners’ laptops from the top rack! That’s where they hide their laptops for showings (See Figure 1).

2. Always Look Inside the Oven before Turning it On Yep, I melted a piece of plastic cookware once. The kitchen smelled horrible after that.

3. Never Leave Keys on the Counter I managed to lock my keys AND my eKey inside a house once.

That was after the inspection was over and ever yone had already left, but still, ver y embarrassing and inconvenient.

Now, I keep my keys in my pocket.

4. Never Trust Shallow Pockets I once lost my phone underneath a deck when it fell out of a sweatshirt pocket. I also lost my phone in an attic when it fell out of my sweatshirt pocket. I also lost a flashlight in deep, fluffy snow, and another flashlight in deep, fluffy insulation.

Reuben Saltzman is a second-generation home inspector with a passion for his work, and is the owner and president of Structure Tech. He grew up remodeling homes and learning about carpentry since he was old enough to hold a hammer. He is now the owner and President of Structure Tech. Visit https://structuretech.com/ to connect with him.

24 Working RE Inspector Winter/Spring 2023

Figure 2: Test GFCI devices this way

And I lost a garage door opener in someone’s yard when it fell off my toolbelt. If deep pockets aren’t an option, retractable tool lanyards work well.

5. Never Test Outlets with a GFCI Tester Until the Garage is Open I once used my GFCI outlet tester on an exterior outlet, and it tripped the GFCI outlet in the garage. That cut off power to the whole garage, which disabled the garage door opener…which was the only access to the garage. I won’t explain how I got back into the garage, but I did, and it required a second trip to the property.

6. Never Test a GFCI Outlet with an External Tester Instead, use the test button built into the outlet. (See Figure 2.)

I once used my external tester on a GFCI outlet where the handy homeowner wired the basement themselves and had installed a half-dozen GFCI outlets in series on the same circuit. My tester tripped all six at the same time, and they were hidden behind cabinets and stored items, and could only be reset in a certain order. I spent about 45 minutes getting all of them reset. page 26 8

7page 24 7. Never Walk on a Wet Wooden Roof Even morning dew will make a wood roof dangerously slick. I remember confidently walking a dry wood roof in the morning, until I stepped on a shaded portion of the roof that was still damp. I went down very quickly, but I managed not to fall off the roof.

8. Never Leapfrog a Roof from a Sloped Roof I almost fell off of a roof doing this when my ladder slipped down. I’ll never do that again.

9. Never Put your Ladder on an Icy Surface Yep, I almost rode my ladder down to the ground when the feet slipped on ice. Luckily, I was stepping onto a flat roof, so I fell onto the roof and caught my ladder before it went down.

10. Never Unlock an A-frame Ladder on a Slick Surface I always put a plastic drop cloth down below attic access panels to prevent insulation messes. At some point, I got in the habit of unlocking the top of my ladder on the way down. This works fine on carpet, but it was nearly a disaster when I tried this with my plastic drop cloth on hardwood flooring. I went straight down as my ladder did the splits. I got really lucky that day, though. I jumped off my ladder and caught it before doing a faceplant.

11. Always Unlock Exterior Doors Before Going Outside I once used a second-floor balcony to set up my ladder to get on the roof, and I locked myself out of the house. My clients were inside the house, so I could have knocked, but I was too embarrassed at this stupid mistake, so I used my ladder to get down and walk back inside. I think they knew what I did, but they were gracious enough not to ask.

12. Never Operate a Radiator Handle I used to operate radiator handles when a radiator wouldn’t heat up…until I had one leak. I stayed at that house for two hours soaking up water with my towels until another inspector in my company brought me some magic plumbing tape to shore up the leak.

13. Never Walk in the Middle of Attic Cross-Bracing If you’re going to walk around in an attic, don’t step on the middle of cross bracing. You might step on a weak portion of wood with a knothole and have the wood break. That happened to me once, and I had a nasty fall inside the attic.

I could have gone right through the ceiling, but I broke the fall when my shin landed on the bottom chord of a truss.

So painful! My knee also put a hole in the kitchen ceiling.

(See Figures 3 and 4.)

14. Never Step on the Bottom Chords of Trusses if They’re Buried in Insulation If you can’t see what you’re stepping on, you don’t know what

26 Working RE Inspector Winter/Spring 2023

Figure 3: Watch where you step

Figure 4: Hole in ceiling

you’re stepping on. I once stepped on a plumbing vent and caused a bathtub drain to come apart, leading to a big mess.

15. Never Forget About a Filling Bathtub I once did that and caused a huge mess inside the house. That was one of the lowest points in my career (You can read the full story here at WorkingRE.com/bathtub).

16. Always Make Sure You’re at the Right House I’ve inspected the wrong house more than once. Check out my blog at StructureTech.com/Blog to read about it.

17. Never Put an Extension Ladder on your Vehicle without Immediately Tying it Down The first time I ever did a home inspection where I took my extension ladder off of my truck, I was still a noob. I didn't want to take time away from my clients by having them watch me fasten my ladder to my truck, so I put the ladder on my truck's rack and planned to tie it down after the inspection. As you might guess, I forgot all about it until I was driving down the road and nearly had my ladder fly off the truck. That could have

turned really ugly. From that day forward, my ladder has never laid on my truck without being fastened down.

18. Never Set Tools Down Out of Sight If I’m going to set a tool down, it needs to be in a conspicuous place. Preferably in the middle of a walking path, so I don’t accidentally leave it at the house. My Little Giant ladder was the first tool I ever left at a house. I made the mistake of leaving it in the backyard. After that day, I always left my ladder in the front yard. I’ve also left my laptop, sunglasses, and countless small hand tools at home inspections.

19. Never Remove a Furnace Blower Fan and Crawl Inside the Furnace in Search of Cracks in the Heat Exchanger I got excited about doing this after attending a seminar for HVAC contractors, and I started pulling out blower fans. It was really quite simple and easy, and I felt good about what I was doing. Until the day a furnace wouldn't turn back on when I was finished. It took me about an hour to figure out that the blower fan had a high-limit switch on the backside. I had disconnected the switch while pulling out the blower fan. A home inspector is there to give the furnace a visual inspection, not dismantle the thing and possibly break it.

20. Never Operate a Natural Gas Appliance if It is Connected to a Propane Source I once unknowingly did this and just about melted my face off. I turned on the oven to heat it up, and shortly thereafter discovered it was set up for natural gas, not propane, which has about twice the energy as natural gas. As the oven was heating, it was also filling with unburned propane gas.

When I opened the door, the air-to-fuel mixture dramatically changed, igniting all of the unburned propane. That was a big explosion right in my face. When I realized the oven was connected to the wrong fuel source, I should have turned it off immediately and closed the door.

Conclusion I could keep going with these stories. I’ve done so many stupid things! But 20 seemed like a good number to stop at. The good news is that I’m no longer in the field, and the home inspectors on my team will never make half of these mistakes. They’re much better at following the rules than I ever was.

If you’re a home inspector reading this list, do you have any personal stories to share? Please share them with us so other people can benefit from them. Thanks! WRE

Working RE Inspector Winter/Spring 2023 27

How Robots Can Help Your Business

by Aaron Cockrell, SuperDroid Robots

As a home inspector, you know that having the right tools can make all the difference in providing thorough and accurate inspections for your clients. One tool that is increasingly becoming popular among home inspectors is the use of inspection robots.

Inspection robots are remote-controlled devices that you, the home inspector, can use to document crawlspaces, underneath decks, and other hard-to-access areas of a home. Many home inspectors use these robots to conduct a video overview of the entire crawlspace, allowing them to see what the robot sees using a display on the remote control and take photos of any areas of concern. After inspecting the area with the robot, the home inspector can then review the HD video and photos stored on the SD card to evaluate any potential trouble spots.

If it is safely accessible, the home inspector may choose to inspect any areas of concern firsthand.

There are several benefits to using inspection robots in your home inspection business. Here are just a few: 1. Allows for more thorough inspections: Inspection robots are often less than 16” wide and 10” high, making them able to fit into crawl spaces that most humans cannot. This gives you access to areas of the crawlspace that may be difficult to reach due to pipes, insulation, and other obstacles. Ultimately, this allows you to provide more thorough inspections, giving your clients the assurance that you have evaluated every aspect of the home.

2. Earn Additional Revenue: You can also create an additional revenue stream by offering crawl space inspections as a separate service to your clients, which can range from $100 to $300 in most markets. This is a valuable service that many home inspectors miss out on because they cannot access these spaces, but with an inspection robot, you can seize this opportunity and increase your business.

3. Reduces your risk and exposure: Crawlspaces can contain a variety of hazards, such as mold, live and decaying animals, Aaron Cockrell is the Customer Success Manager for SuperDroid Robots. He uses his technical expertise to ensure customers get the most out of their robots and collaborates with the engineering team on custom robots. Over the past six years, Aaron has worked with hundreds of home inspectors as the company’s GPK-32 inspection robot is one of the most popular robots. You can reach Aaron at (919) 557-9162 ext. 410 or by email at aaron@sdrobots.com.

28 Working RE Inspector Winter/Spring 2023

and hazardous materials. An inspection robot allows you to see inside the crawlspace from a safe distance, reducing your exposure to these dangers. If you do need to access the crawlspace, you can do so prepared with the right tools and protective gear to keep yourself safe.

4. Increases referrals from real estate agents: Homebuyers often turn to their real estate agent for recommendations on home inspectors. These agents want to know that their clients are getting a thorough inspection to protect their buyers and gain leverage in negotiations, so they often choose a home inspector who can access crawl spaces rather than just checking an inaccessible box. By using an inspection robot, you can provide high-definition video proof of your thorough inspections, which can increase referrals from real estate agents.

5. Increases efficiency without sacrificing quality: Using an inspection robot can be faster and more efficient than crawling around a crawl space on your stomach with a camera. It also allows you to conduct inspections without sacrificing the quality of the inspection.

6. Allows you to add inspection videos to your website: You can build credibility with potential clients by showcasing your thorough, high-definition video inspections. You can even post one inspection per week to your blog, along with a story of any problems you found and how you helped your client save money. This can add valuable content to your website and increase your search engine ranking, positioning you as the go-to expert for agents and homebuyers.

7. Helps you attract customers via social media: Videos and photos from your inspection robot make great content for social media channels like Facebook, Instagram, and TikTok. This content is relevant and current, and it keeps you top of mind with real estate agents and homebuyers. You can even post your inspections on YouTube, the second largest search engine, which can help with search listings.

8. Increases customer satisfaction: Using an inspection robot can provide your clients with a more thorough and efficient inspection. This increases customer satisfaction,

as your clients will feel confident that you have thoroughly evaluated their potential new home.

In addition to the benefits outlined above, home inspectors may want to consider using inspection robots for other reasons.

One reason is that they can save time and money. As mentioned before, inspection robots can be more efficient than traditional methods of inspecting crawlspaces, allowing you to complete inspections faster. This can be particularly useful if you have multiple inspections scheduled in a single day. Additionally, because inspection robots can reduce your exposure to dangers like mold and hazardous materials, you may save money on protective gear and cleaning supplies.

Inspection robots can also help you stand out in a crowded market. As more and more home inspectors become licensed or certified, it can be difficult to differentiate yourself from the competition. By using inspection robots, you can offer a service that many of your competitors do not, which can help you attract new clients and build a strong reputation in your area.

It's worth noting that while inspection robots can be a valuable tool, they are not a replacement for your expertise as a home inspector. Using your knowledge and training to evaluate the home and identify potential issues thoroughly is still important. However, by using an inspection robot with your skills, you can provide a more comprehensive inspection to your clients.

In conclusion, inspection robots can be a valuable tool for home inspectors. They provide access to more crawlspaces, reduce risk and exposure, plus they allow for more thorough inspections. Inspection robots can also increase referrals from real estate agents, increase efficiency without sacrificing quality, enhance your capabilities and range of vision, and help you stay up-to-date with the latest technology. By incorporating inspection robots into your business, you can provide your clients with a higher level of service and increase your success in the industry. WRE

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Working RE Inspector Winter/Spring 2023 29

How to Market Your Business to Real Estate Agents

by Kendra Budd, Editor

Home inspectors everywhere can almost agree on one thing— marketing to real estate agents is exhausting. But, to make matters worse marketing your home inspector business to real estate agents during a slowdown can feel impossible.

The world of technology has vastly impacted the way we market ourselves and our businesses. From email campaigns to regular posting on social media (and commenting too!)—the possibilities are endless.

If you want to make a huge impact during the slowdown, you’ll need to make in person connections. Right now, real estate agents are more likely to use and refer home inspectors they trust and have strong relationships with. Simply handing out a stack of business cards won’t do. You need to market yourself—the inspector—as the product, not only your business.

Ian Robertson, creator of Inspector Toolbelt Talk podcast, recently discussed how home inspectors can realistically market themselves to real estate agents by teaching them how to brand, make connections, and accept failure.

Here’s what we learned.

Branding Before a home inspector can begin to market themselves directly to a real estate office, Robertson believes they must do some housekeeping first. Inspectors should be taking a close look at how they reflect their brand both virtually and personally.

There are three essential functions to building a successful brand as a home inspector.

1. Uniform and Logo Robertson firmly believes that every home inspector needs a uniform and logo to both work and market themselves in. “If you don’t have a professional logo or uniform, you’re just shooting yourself in the foot. You won’t go anywhere because you don’t look like a professional,” Robertson says.

2. Website Having a professional website will be one of your biggest assets as a home inspector, because real estate agents will use this to both research and recommend you. Robertson knows this from his personal experience as a business operator.

30 Working RE Inspector Winter/Spring 2023

If someone recommends himself as a contractor, “The first thing I do is look for a website. If they have a junky website or don’t even have a website at all, I would never recommend them. So why would an agent recommend us if we don’t look like we’ve ever existed?” Robertson iterates. Having a clean, easy-to-use website versus having a website that was built quickly or not having one at all can severely affect your business. Your online presence is just as important as your in-person persona.

3. Business Cards Obtaining business cards is only the first step—you also need to make sure they look good. There are several ways to achieve this. A good business card will have your website, full name, business number, and of course your logo. Remember, the logo is what makes you memorable.

However, you don’t want to just use any website to print off these cards. “If you’re getting free business cards, like from VistaPrint that has their logo on it, you’re just throwing away money,” Robertson warns. This tends to be a turnoff to most real estate agents. If you can’t afford professional business cards, then you might be too new to the business or maybe you just don’t care to make a good impression. Whatever the reason, spending money on professional and original business cards will help you be more memorable and build your brand.

Branding essentially refers to marketing yourself. The way you just even subtly present yourself out in public is key to getting business. “Logo, uniform, and online presence. Don’t show up to offices until you have that,” suggests Robertson. Once these three marketing tools are in place, you’re ready to make your in-person connections.

The Four Touch Rule Making connections with real estate agents and brokers can be daunting—especially when everyone else is doing the same thing. The foundation of any good relationship is trust. “People recommend someone that they trust, and we as human beings trust on a very arbitrary basis,” Robertson reports. So, how do we build that trust if it’s just random?

Robertson says the best strategy for building trust is something called the four-touch rule. “The four-touch rule has been

a hard-set rule in my business model, and millions of others around the world for a long time. Once we’ve ‘touched’ a person four times as a salesman, then that person starts to trust us,” explains Robertson. Basically, after making a connection four times with an individual, trust begins to build within the relationship because they become more familiar with you.

Building up a four-touch relationship with a client takes a lot of tenacity and patience. When Robertson first started, he treated his visits to real estate offices as work instead of a chore.

“I would get up and pretend it’s my 9–to–5 job—put on my uniform, and then in those hours I would visit real estate offices.

But it was more than that too. I was very methodical,” says Robertson. This includes keeping a log of notes and building a route of real estate offices to check back in on every two to three weeks in order to build up those connections.

Consistency is key, and Robertson uses a fake scenario to help better explain the four-touch rule. First he tells us his two strategies are only leaving one card, and getting to know the admins of the office. “Don’t try to get past the admins— make them your ally. They are the most important person in that office because they are the gatekeeper to the broker and agents,” Robertson explains. The one card trick will come into the scenario later.

Continuing with the scenario: Robertson learns on his first visit

that the admin’s name is Amber. He’ll take note that Amber has a picture of a golden retriever on her desk before giving her a business card—this is the first touch. “Next time I go back in, it’s a new admin, let’s say her name is Katie. I’ll say, ‘Hey Katie, I don’t know if Amber mentioned me, my name is Ian. I left my business card with her a few weeks ago, hopefully she’s doing good.’ Then Katie tells me that Amber had to take her dog to the vet. Then I say, ‘The golden retriever, right?’”

Robertson narrates.

Making this connection with both Amber and Katie prompts them to start talking about Robertson, becoming the second touch. Not only that, but Robertson now has new information to work with—he takes note of Amber’s sick dog. By his third time in, he can ask Amber about her dog, which will prompt her to talk about Robertson even more—the third touch.

The fourth touch is usually when Robertson would meet the manager of the office. By this visit, or touch, the manager is more inclined to meet the person the admins keep raving about.

Once this happens, now is the time to invoke Robertson’s one card trick.

The One Card Trick Usually, home inspectors will leave a stack of business cards, along with candy or even a gift basket. Robertson believes this page 32 8

Working RE Inspector Winter/Spring 2023 31

7page 31 to be just a waste of money. Robertson explains, “If you leave an office a stack of cards, they’re going to throw them away.

If you leave a gift basket they’re going to eat all the goodies inside and forget all about you.” Real estate agents get tons of business cards from home inspectors; it is unlikely they will keep them all. You need to build up the relationship until you’re confident enough they won’t throw your stack of cards away.

Once you meet the manager, broker, or agent in person, you’ll want to use the one card trick on them. “I would hand the business card to the broker, and it would happen like clockwork.

The broker would stop me and say something along the lines of, ‘Let me tell you something about marketing, never leave me one business card. Leave me a stack.’ So now instead of giving him a stack of business cards he’s going to throw away, he’s asking for them. There’s a complete change in mentality now,” Robertson explains.

Now, the office is chasing after you. By utilizing the four-touch rule and only leaving one business card, you have piqued their interest in your business. Of course, this is an ideal scenario and it shouldn’t be expected that this will work out perfectly every time.

Enjoy Rejection Robertson has seen a lot of success from home inspectors who use the four-touch and one card rule. “There’s a home inspector in my area who takes a four hour segment each week to do these routes, and it’s already getting him a vast amount of work. Another inspector who used to work for me did the same thing, and got over 10 0 inspections in his first month,” says Robertson. However, these two marketing strategies are not going to guarantee you work.

The example of the four-touch rule above was an ideal situation. Home inspectors shouldn’t expect to see extraordinary success right away. The road is also paved with rejections, which Robertson doesn’t necessarily believe is a bad thing.

If a real estate office rejects you, keep going back on your scheduled route anyway. You want those four times of interaction.

“We want to be there when they start rejecting their other home inspector,” Robertson explains. If you’re continually making progress at building a relationship with an office, they’re more likely to go to you when things sour with your competition.

“The difference between someone who is successful at visiting real estate offices versus someone who’s not, is the other person gives up. You’re going to get rejected. Embrace that.

99.9% of people are going to reject you. Awesome. Realistically you only need 0.01%. Once you’ve accomplished that, you can work on building your other marketing campaigns,” Robertson emphasizes. Rejection is often disguised as a great opportunity waiting down the line.

Final Thoughts Marketing to real estate offices is only one of many strategies of building a lucrative and successful business, but it’s a great stepping stone. It may not come easy at first and there are likely to be bumps in the road and plenty of rejection. But it works!

Using Robertson’s techniques might be the boost you need.

To hear more of Ian Robertson’s podcasts, visit https://inspectortoolbelt.com/home-inspection-podcast/.

Stay safe out there! WRE

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How to Make More Money as a Home Inspector

by Lauren Kelly, HomeGauge

One of the biggest reasons people choose to become home

inspectors is that they want to control their own destiny.

Starting your own home inspection business gives you the power to fully manage your own schedule, and at the end of the day, you answer to you—not a general contractor, municipal building inspector, or corporate overlord.

On the other hand, all that freedom comes with a price. It’s all on you to make your company grow. T hat can be tricky when you’re offering a service. There are only so many hours in the day, right? At some point, doubling your workload to earn more just isn’t going to be feasible.

Fortunately, there are several things you can do to streamline your business practices and add some out-of-the-box ideas to boost your income, while still managing to have some free time to live the life you want. Try these ideas to increase your home inspection business profits.

1. Audit Your Costs and Cut Where You Can If you’re the only one on your payroll, it’s easy to assume that you don’t really have any business costs. But every business has some cost of entry, so it’s a good practice to make sure you know exactly where your money is going.

To get a handle on this, it’s time to make a list. If you already save receipts for your business expenses for tax time, pull out the most recent years’ worth. If not, here are some common home inspection business costs to get you started: • Office Space: Rent/mortgage, utility costs, insurance, etc.

• Transportation: Vehicle loan, fuel, mileage, insurance, registration, maintenance • Equipment: Annual equipment costs and maintenance, including items that need to be replaced regularly • Marketing: Advertising costs, including your website, Lauren Kelley is the Marketing and Business Development Manager at HomeGauge. She focuses on driving inspector success to new heights. Having vast experience working with new and experienced inspection businesses of all sizes, HomeGauge has provided home inspection software and business solutions for over 20 years. Whether you are new to the industry, or looking to scale, HomeGauge has everything inspectors need. Visit HomeGauge online at: https://www.homegauge.com/orep/.

34 Working RE Inspector Winter/Spring 2023

branded handouts—like business cards, brochures, and magnets, plus any other gifts you give to Realtors and clients • Office Supplies: Paper, printer ink, computer costs, staples, paper clips, pens—all the little things you need • Other Business Expenses: Uniforms/branded clothing, business insurance, home inspection software, and any other specialty item you use for your inspection business Once you have your list, review it carefully. Is there anything you don’t actually use or that hasn’t been effective? If those donuts you take to real estate agencies don’t actually lead to more business, see what happens if you cut that expense for a bit.

Next, review your expenses for places where you can save.

Maybe you can shop around for a better deal on insurance, utilities, or office supplies. You might also consider asking for a discount from a supplier if you’ve been a long-term customer—you never know until you ask!

While cutting your expenses may seem like small potatoes, it’s an important business practice to ensure that you are operating as efficiently as you can. The old saying about a penny saved being a penny earned really is true!

2. Strategically Raise Prices Raising prices can be scary because it’s easy to assume that your current clients will run away screaming at the very thought.

Home inspectors have an advantage in this department because your direct clients—typically homebuyers—aren’t coming to you for repeat business ver y often. They won’t know if you raised your rates over last year’s prices unless they buy a house every year, which is pretty unlikely!

What they will notice is how your prices compare to your competitors. This is where pricing strategy comes into play. You’ll want to spend some time researching what other local home inspectors are charging for their services.

To do this, make a list of the other home inspectors in your area. If you live in a sparsely populated area, you can include page 36 8

7page 34 all of the inspectors that pop up on a Google search. If you live where there are loads of other inspectors, you may have to limit your list to just the ones that offer the same services you do, or who target the same types of clients. Just do your best to get a broad view of the market in your area.

As you research, it’s important to get an apples-to-apples look at pricing, so dig into what each inspector is offering for their rate. Are they adding any extras in, like a free do-it-yourself radon test kit? Do they add value with new technology, like drone cameras? When you make a list, be careful to detail what comes with the price.

Once you’ve got some info, it’s time to analyze. Find the average cost for a baseline, and consider where you stack up compared to that number. If you’re below average, consider raising your prices to meet the average for your area, which is a perfectly reasonable change to make.

If you’re already near the average or above, you may still be able to raise your rates if you find a way to add value. Valuebased pricing means zeroing in on something that differentiates you, deciding what that’s worth, and raising your price accordingly. For example, if no one in your area has that drone for roof inspections, and you add roof photos to your inspection report, you’re adding value. Is it worth an extra $50? That’s up to you—just be sure to highlight that special touch on your website and in all your materials to justify the higher rate.

3. Add Ancillary Services your Customers Crave If you’re looking for ways to add value, consider offering some additional services that your clients are likely to need.

For example, you may come across common issues during an inspection that require further probing beyond the standard inspection. Instead of sending your clients elsewhere for those services, offer them yourself!

There are many ancillary services that Home Inspectors can consider. Some of the most popular include: • Asbestos testing • Sewer scope inspections • Indoor air quality testing • Water quality testing • Pool and spa inspections • Radon testing • Home energy audits • Lead paint testing • Mold inspections • Wood Destroying Organism inspections To decide what will bring the most value to your business, consider the common issues in your region. For example, mold will likely be an issue in damp regions or those areas prone to coastal flooding and storm surges. Meanwhile, lead paint testing is needed in areas with an older housing stock.

Talking to your contacts in real estate offices is also a great way to get a sense of what their clients ask for so you can meet 36 Working RE Inspector Winter/Spring 2023

those needs. You can also consider asking contacts and clients to complete a quick survey to get a sense of how to expand your business.

4. Streamline your Practices You can’t add hours to the day, but you can work to be more efficient at what you do. If you’ve been running yourself ragged, take some time to figure out exactly where you’re spinning your wheels.

For example, how smooth is your scheduling? If you’re spending a lot of time playing phone tag with customers to get their inspections scheduled, it’s time to consider an online scheduling program that makes it easy for clients to click and book— all to populate your calendar automatically.

You might also consider scheduling in a regional way if you cover a large geographic area. For example, if you can find a way to keep one county’s inspections on Mondays and another’s on Wednesdays, you can save yourself some commuting time in between jobs.

Likewise, the right tools will help you write up your inspection reports faster. Great home inspection software keeps you organized and makes it easy to turn your notes into a polished report that you can submit electronically. If you can shave hours off of your paperwork time, you’ve given yourself more opportunities to get out in the field with paying clients.

5. Hire Extra Help If you’ve done all of the above and still want to grow, it’s probably time to consider bringing on an extra set of hands to expand the number of clients you can see each week. This is a complex business decision, as you’ll have to weigh the costs of wages, benefits, and training with the additional income you expect to bring in from hiring. At some point, hiring is the only way forward if you want to take on more clients than you can serve on your own.

Another option is to consider a partnership or co-op arrangement, where you share the costs of doing business with other Inspectors and come up with an equitable way to share profits.

Depending on your model, that could be an equal division of profits or a system in which each inspector keeps the fee for the clients they bring to the table. WRE

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Do You Need E&O Insurance as a Home Inspector?

by Kassandra Jessup-Prater, RWS Insurance Services

Experienced home inspectors know what to look for in any given job, and most veteran inspectors have detailed procedures and practices for reporting their findings in complete and comprehensive ways to clients.

However, even the most experienced home inspectors sometimes make mistakes…and even if you don’t make a mistake, a particularly litigious client can still wreck your business’ progress and tie you up in court for years if you’re not careful.

To protect yourself and your business, you should know whether you need E&O insurance as a home inspector, what types of E&O insurance is available to you, and when you might need it. But first, if you’re unfamiliar with E&O insurance, let’s go over the basics.

What Is E&O Insurance?

E&O insurance is shorthand for Errors and Omissions insurance.

It’s sometimes known as “professional liability insurance.”

An E&O insurance policy helps protect service professionals and service-providing businesses against the financial consequences of lawsuits related to their work. E&O insurance covers specific types of liability claims, like: • Negligence or substandard service delivery • Failure to deliver services or meet deadlines (contract breaches) • Errors or oversights (omissions) in the work • Misrepresentations or inaccurate advice E&O insurance is different from general liability, which tends to cover physical injuries and property damage. General liability claims, for home inspectors, typically involve “oopsie” mistakes like leaving water running after you leave the inspection, accidentally putting your foot through the floor, and similar stuff.

Kassandra Jessup-Prater is a Licensed Adjuster for RWS Insurance Services. She holds her Adjuster License in 48 states. Kassandra also holds a Degree in Paralegal Studies and Graduated with Presidential Honors in 2010. With over 13 years of experience in the Legal and Insurance Fields Kassandra works hard every day to provide excellent service to all RWS Insurance customers.

38 Working RE Inspector Winter/Spring 2023

How Does E&O Insurance Work?

E&O policies typically cover expenses related to defending against such claims, including legal fees and court costs.

However, the scope of E&O coverage may vary from insurer to insurer, so it’s important to obtain and read the full policy, particularly where it discusses the specifics of its coverage and what costs it’ll handle.

It’s important to understand that E&O insurance generally won’t cover criminal and/or illegal acts, bodily injury, and other non-negligent failures of service. It may not cover subcontractors or temporary employees, either, so be careful when adding non-salaried staff to handle your inspection jobs.

Of course, it’s highly unlikely a home inspector will injure a client while inspecting a home, and if you don’t steal anything or stab anyone while you’re on the job, you should probably be clear of criminal liability as well.

But these gaps don’t mean you shouldn’t have E&O insurance.

If anything, you may want to require any subcontractors or temporarily-employed inspectors to carry their own E&O policies, just to be on the safe side.

How Much Does E&O Insurance Cost?

The costs of E&O insurance will vary between insurers, but it’s generally settled into a predictable range.

According to The Hartford Insurance, E&O policies typically cost between $500 to $1,000, per employee, per year. Insureon says the median cost of an E&O policy is $59 per month, or $708 per year, but it offers some industry-specific numbers as well—real estate professionals as a broad category (including agents and appraisers) pay a median premium of $665 per year.

Based on these reference points, you can probably budget about $83 per employee per month for your E&O policy. At this level, you’ll be able to cover premiums up to the maximum expected annual limit of $1,0 0 0 per year. If your policy is cheaper, you can always adjust your budget later, or allocate your savings towards other business initiatives.

Do you Need E&O Insurance as a Home Inspector?

Want to know if you should get E&O insurance?

Fill out this checklist, and when you’re done, we’ll see if you’ve checked off enough qualifications to go ahead and purchase an E&O policy in the near future.  Do you NOT live in any of the following states? (states not on this list require home inspectors carry E&O) • Colorado • Montana • Connecticut • Nebraska • New Hampshire • Delaware • New Mexico • Georgia • South Carolina • Hawaii • South Dakota • Idaho • Utah • Illinois • Vermont • Indiana • Washington • Iowa • West Virginia • Louisiana • Wisconsin • Maine • Wyoming • Minnesota • Missouri  Do you offer ancillary services (mold, radon, etc.)?  Have you (or any inspector you know) ever been threatened with a lawsuit?  Have you ever been told you “missed” or didn’t notice a major issue during an inspection, such as water damage, odd smells, deterioration, etc.)?  Do you think you might ever be sued by a client in the future?  Do you want to pay for legal damages out of your own pocket?

This is a pretty straightfor ward checklist for most inspectors. If you check off most boxes, or at least ever y box that doesn’t ask where you live, you should certainly consider getting E&O insurance.

However, the most important question to check off will ultimately be the last one. A busy professional, with enough clients on a long enough timeline, is almost certain to face a lawsuit—merited or not. Even if you think it might save you money to skip out on your E&O insurance, any “savings” can quickly be wiped out by the cost of just one lawsuit.

Paying $1,000 a year for E&O coverage might seem steep, but you could easily lose tens (or hundreds) of thousands of dollars if a liability-based lawsuit is ever decided against you—or even if it’s not, since retaining good legal counsel is never cheap.

How to Choose the Right E&O Insurance Provider If all else is equal, you’d probably just look for the insurer promising you the lowest premiums for the most robust coverage. But all else is rarely equal. Insurers offer varying levels of coverage at varying rates. Some bundle E&O liability with general liability, while others keep the two types of coverage strictly separate.

When searching for an E&O policy provider, look for an insurer with a reputation for good service and low costs. Check your policy details closely before signing anything, so you can understand how much your policy will cover (the coverage limit), what specific issues it will and will not cover, who it will cover, and how you should go about filing a claim if you should ever need to.

One important consideration is how much experience an insurance provider has in actually defending home inspectors. Some insurers offer broad E&O liability policies for professionals; this doesn't mean those insurers know their way around home inspections, or that the person who might handle your claim knows anything about the work you do.

Home inspector claims are unique and you will want to purchase from a provider with extensive experience defending home insp ectors. This means that even if you get a broad coverage policy at a good price, if the insurance provider isn't experienced in home inspector claims, they may not handle your claim correctly or will pay out on a frivolous claim. When frivolous claims are paid out it will ultimately cost you more in the long run as you'll have a loss associated with your insurance account and your rates will go up.

Inspector-specific E&O insurance should provide tailored coverage for a home inspector's specific needs—for example, if you only offer standard inspections, you may not need broader E&O that covers ancillary services, such as inspections for radon, mold, or termites. These insurers tend to base coverage and limits on each inspector's needs while accounting for applicable state regulations or other location-based requirements.

These companies would make good starting points in your search, but you shouldn't feel limited to inspection-focused insurers. You should be in good hands as long as your insurer has reasonable premiums, good service, and strong coverage. WRE

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Professional Marketplace EXPANDED HOURS 8-8 EST (5-5 PST) (888) 347-5273 LIVE CHAT at OREP.org E&O/GL Insurance Broad Coverage, Peace of Mind Broad coverage should never be optional, according to Isaac Peck, Senior Insurance Broker at OREP. “If you want to do the best for yourself, your family and your business, be sure to choose a professional insurance policy that will protect you adequately should the unexpected happen,” Peck says. “A broad policy covers you for the threats that you can anticipate as well as the unexpected ones that you don’t see coming. A broad policy covers all the bases and keeps you safe.” The OREP E&O insurance program includes Errors and Omissions, General Liability Coverage, Radon, Termite/WDI/WDO, Lead Paint, Pool & Spa, EIFS/Stucco, Indoor Air Quality Testing, Green Building Inspections, and Infrared Thermography. Prior Acts, multiple inspectors, commercial, additional insured for agents/referring parties and much more are included. Mold and septic are available. Please ask your OREP agent for details. All Members enjoy free claims assistance, risk

40 Working RE Inspector Winter/Spring 2023

management and automatic membership in the OREP Professional Supp ort Net work ($59 value), which includes free, on-demand inspection support, savings on professional contracts, discounted state-approved education and training, Working RE magazine, discounts on office supplies, technology and more. Call (888) 347–5273 or visit us online at OREP.org.

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California OREP Members—Group Medical $10,000 Life Included OREP Members in CA enjoy access to Kaiser Permanente and Blue Anthem plans. The group plans provide benefits not available to individuals and at no extra cost. Those who purchase their medical coverage through the OREP group plan also enjoy a $10,000 life insurance policy included at no extra cost. The policy, written through Mutual of Omaha, is guaranteed-issued without any exclusion for medical conditions and pays double in the event of accidental death and dismemberment. Also included is the New Dental Choice Plan that gives you significant discounts of 15–60 percent for dental services. There is no cost above the medical plan itself for these services, including expert help navigating Covered California. If you are a CA resident/OREP Member email info@orep.org for information.