Sunday, January 17, 2010

E And O Insurance Claims in New Mexico

E and O, or Errors and Omissions insurance is a broad-reaching type of coverage which protects professionals (real estate agents and brokers) from liability resulting from negligence after a sale, unintentionally omitting information on a property, and MLS listing errors, among others.

Even the most honest Realtor can end up as a defendant in a lawsuit. Without comprehensive Errors and Omissions insurance, companies or agents might have to pay thousands of dollars to clear your name--even from a frivolous liability suit.

A recent article from the Albuquerque Real Estate Board, or the GGAR (Greater Albuquerque Association of Realtors) was interesting to read, aimed at their Realtors. We sell SC renters insurance and SC homeowners insurance, but the industry as a whole is affected by all its types and divisions.

What Causes High Dollar E and O Insurance Claims
in New Mexico?
By Cindy Rice-Grissom, CEO - Rice Insurance Services

As part of a new risk reduction initiative, the New Mexico E&O insurance administrator, Rice Insurance Services Company, LLC has conducted a review of the 31 New Mexico claims that involved incurred amounts over $50,000 since 2004. The incurred amount includes damages paid, estimated damages to be paid, expenses paid in defending the claim, and estimated expenses to be paid in defending the claim.

One clear finding from this review is the need for a reminder to all licensees to verify information prior to including it in the Multiple Listing Service (MLS). Five of the high dollar claims involved inaccurate information included in a MLS listing. Two claims involved the agent using old MLS information without verification of current information (one previous listing incorrectly stated that the unit included a garage, and another previous listing incorrectly stated that a guest house was included with the property and could be used for rental income).

One claim involved new construction when changes were made to include additional amenities and the agent updated the MLS listing with the new price but failed to list the new upgrades. One claim involved a listing misrepresenting that the house as being designed by a famous architect. One claim involved misrepresentation of the square footage in the MLS.
Download the PDF Whitepaper to

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