Reports & Insurance Agencies

Question: I completed an inspection last week, and the customer has an insurance agent pricing homeowners insurance for them. The insurance company wants my inspection report. They also sent me a form requesting me to sign off on HVAC, electrical, plumbing, and roofing, stating all systems are in good working condition. I’m hesitant. I don’t want to be held liable for my customer’s home insurance. What should I do?

-ASHI Home Inspector

Question: I completed an inspection last week, and the customer has an insurance agent pricing homeowners insurance for them. The insurance company wants my inspection report. They also sent me a form requesting me to sign off on HVAC, electrical, plumbing, and roofing, stating all systems are in good working condition. I’m hesitant.
I don’t want to be held liable for my customer’s home insurance. What should I do?

-ASHI Home Inspector

Answer: We get a lot of questions about inspection report writing and how to make recommendations in a report. It’s not every day we hear stories about homeowners insurance companies asking inspectors to sign off on their work, but it does happen. And this inspector is right to be concerned. Some red flags:

■ Although the client signed a pre-inspection agreement, outlining the inspector’s scope, limitation of liability, and other claims-fighting provisions, the homeowners insurance company asking for the inspection report did not. What if the insurance company finds fault with the report?

■ While identifying defects and determining systems and components’ conditions at the time of the inspection is within scope, providing a warranty or life expectancy prediction is not. In fact, the ASHI Standard of Practice specifically states inspectors aren’t required to pinpoint systems and components’ remaining life expectancy. (ASHI SOP 13.2.A.2.) But will the client or the insurer interpret the inspector’s signature on the document as a guarantee?

■ What is the insurance company hoping to achieve by having the inspector sign this document? Are they trying to shift liability?

When you step back, it’s easy to see all the potential ways this scenario could blindside an inspector or expose them to blatant risk. So what should home inspectors do when they receive requests like this one? 

Here’s what we recommend:

1. Don’t send your inspection report to anyone except the clients who paid for it. And discourage them from sharing the report with others.

2. Do not sign documents asserting the current or future condition of systems or components.

3. If inspection clients want to know why you won’t sign, explain that you’re unable to make any representations or warranties for the expected service life or future condition of any system or component.

4. If inspection clients are adamant about you signing something for their homeowners insurance, contact your home inspector insurance provider. They may be able to provide you with a letter or addendum to limit your liability when providing a signature.

Have more questions relating to managing risk? Your home inspector insurance provider is your best resource. Contact your broker or account manager for guidance on all your liability concerns.

– Your Friends in CYA

Opinions or statements of authors are solely their own and do not necessarily represent the opinions or positions of ASHI, its agents, or editors. Always check with your local governmental agency and independently verify for accuracy, completeness, and reliability.