The deductible on your real estate E&O insurance policy is going to function in a similar capacity to other deductibles you may have, such as for auto or medical insurance. A deductible is your total out of pocket expense paid before your insurance kicks in.
The difference between real estate E&O insurance deductibles and most other deductibles is that you can take steps to reduce your deductible per transaction. Here’s how.
Step one: Familiarize yourself with your E&O policy benefits
You should know and understand your policy throughout. At a minimum, look at your Declarations page. It will state how much it will pay toward damages, and what your responsibility is should a claim arise. However, it likely will not list how you can reduce your deductible. This will likely take a call to your insurance company or insurance broker (whoever sold you the policy). If they don’t offer products or services to reduce your deductible, it’s time to shop around to find a company that does.
CRES offers several ways to reduce your deductible, including through the use of CRES Building Permit History Reports and home warranty products with your clients.
Step two: Look for opportunities to reduce your risk — and deductible — on each transaction
Evaluate each transaction to look for opportunities where products or services can be used with clients to reduce your deductible. For example, if you are representing a seller on an older home with questionable appliances, remodeling or repairs, then the risk of a claim is higher. Consider the options your real estate E&O insurance company has available to you to reduce these risks, as well as your deductible.
CRES offers Seller’s E&O, Building Permit History Reports, Qualified Home Warranties — all designed to reduce your risk and that of your seller. What does your real estate E&O company offer — if anything?
Step three: Load up your tool kit to reduce your deductible and your risk
Does your real estate E&O offer ways to reduce your risk and deductible per transaction? With CRES E&O + ClaimPrevent™, you’ll have an arsenal of products you can use before the close of a sale — and to help prevent a claim from ever happening, including:
CRES Seller’s E&O Protection Plan: This product is exclusive to CRES. Seller’s E&O provides your sellers with $25,000 in E&O coverage to protect them up to 180 days after the sale. Use this to attract more listings — you’ll have a competitive advantage, because you can offer Seller’s E&O to potential seller clients when no one else can. CRES members can increase the Seller’s E&O to $50,000 (or even $75,000) and reduce your own deductible when your client also buys a CRES Qualified Home Warranty product (in states where available).*
CRES Building Permit History Reports can reduce your deductible liability when shared with a buyer before the close of a sale. One in five claims result from a permitting issue. Utilizing these reports also helps prevent claims. CRES offers at least 25 free reports per year as part of our real estate E&O + ClaimPrevent™ policies.
Aren’t you curious now, to know if there may be a way to reduce your deductible? Why not call your real estate E&O insurance company or broker to find out. If they don’t offer options to help you do this, then it’s time to consider real estate E&O companies that do. At CRES, we believe you should be rewarded when you proactively work to reduce claim risk.
*Read each policy for a full comparison of coverage and benefits. All coverage is subject to Underwriting and other qualifications. The E&O Deductible Reduction applies to any real estate licensed Real Estate Agents Alliance Purchasing Group (REAAPG) member who personally pays for the Home Warranty Plan. Seller’s E&O coverage and other benefits are feature based and warranty specific. These benefits are offered by, and intended for, the members of REAAPG. Not available in all states. Certain restrictions apply.
Have you used a little real estate E&O insurance creativity to reduce your deductible? Tell us in the comments below!