How Home Inspection Photo Evidence Won a $15,000 Claim

Note: The Managing Risk column with InspectorPro Insurance provides home inspectors with tips to protect their businesses against insurance claims, craft effective pre-inspection agreements, offer additional inspection services, and use new tools and equipment.

This article was originally published on the InspectorPro Insurance website. Read the full article on their blog here. To protect the insured’s identity, all identifiable characteristics from this home inspection claim—including names and associations—have been altered or removed.

One inspector. A few photos. One meritless claim, shut down. More often than not, the right home inspection photos can clear up meritless conflicts just as fast as they begin.

In this case study, we’ll look at a scenario where one inspector’s photos did exactly that—and saved the day.

The Inspector’s Frivolous Claim

In a formal letter to the inspector, the buyers—we’ll call them Mr. and Mrs. Cliff—expressed “significant concerns about the thoroughness and accuracy” of their inspection. Their biggest issues were a furnace damaged by a leaking air conditioning unit, carbon monoxide exposure, and an exposed electrical wire, which injured one of the claimants and would require rewiring.

The Water-Damaged Furnace and Air Conditioner

Three months after the inspection, a cold spell prompted the Cliffs to turn on the furnace. When the furnace failed to generate heat, they hired HVAC specialists.

Because the buyers weren’t present for the home inspection, the report photos were their only window into the property’s condition. So when they held the inspector’s photo documentation of the furnace against the broken-down unit in front of them, the differences were impossible to miss. The Cliffs’ attorney put it this way:

“The two sets of photos almost look like they are of different units, rather than the same furnace a few weeks apart,” the letter said. “In the photos taken by [the HVAC specialists], there are rust stains, signs of water at the base, and water damage.”

The HVAC technician had found water pooling at the base of the furnace. They believed the air conditioning system was leaking water down into the furnace below, damaging it to the point of being unusable. The Cliffs demanded compensation for replacing the air conditioning and furnace systems: more than $12,000 in parts and service fees.

Response

The inspector had tested the air conditioning and furnace systems. Both were functional at the time. The inspector even included photos of the furnace burners lit up and operating.

He warned, however, that the furnace was 16 years old and would need servicing before its next seasonal use. The AC system, too, was only “marginally acceptable,” performing as designed at the time of the inspection but in need of repair or replacement soon due to age and deterioration.

He had no way of predicting future conditions, like the AC leaking and damaging the furnace—especially when the Cliffs ignored the inspector’s recommendations to have the AC repaired or replaced. His photographic record proved that the damages must’ve become obvious only after the inspection. The Cliffs, in turn, only proved that they neglected to follow their inspector’s advice.

The Carbon Monoxide Exposure

Next, the Cliff family wanted compensation for alleged carbon monoxide exposure. Although the furnace was completely nonfunctional, the Cliffs claimed it was giving them “flu-like symptoms” before they replaced it. They reported experiencing “headaches, nausea, dizziness, and confusion,” which coincided with their attempts to operate the system.

Response

Carbon monoxide exposure is serious and can even be deadly. For this reason, inspectors are seeing increasing demand for carbon monoxide inspections. But the Cliffs did not pay for or request a CO inspection. Even if the furnace was leaking carbon monoxide from past use, the inspector had no way of detecting active CO without a CO inspection, nor could he have predicted future leaks or found existing ones. Detecting cracks or holes would’ve required dismantling the unit, which his report stated went against his standards.

Plus, if the Cliffs had followed the inspector’s advice and hired an HVAC technician sooner, they might’ve caught a CO leak sooner. In short, while the Cliff family’s illness was unfortunate, our inspector was not responsible.

The Live Exposed Wire

Shortly after moving in, Mr. Cliff touched one of the basement walls and received an electric shock. He moved to the other side of the wall and was shocked again. The shocks knocked him to the ground.

Upon investigating, the Cliffs discovered an exposed, 220-volt live electric wire in the basement. Their attorney’s letter described the exposed wire as an “obvious condition that should have been detected and flagged in the report.”

Response

The inspector had taken a photo of the exact basement spot where he allegedly missed the exposed wire. In his photo, the wire was visibly tucked away close to the wall.

Thanks to the inspector’s home inspection photo evidence, it was clear the inspector was not negligent in reporting the wire because it wasn’t exposed, loose, or visibly dangerous during the inspection.

The Cliff Family’s Demands

The Cliffs wanted reparations for the “injuries, damages, losses, inconvenience, and emotional pain and suffering” that resulted from the home’s deficiencies. Between the $12,000 they paid to replace their air conditioning and furnace systems, their injuries from the shocks and alleged carbon monoxide exposure, and the costs of rewiring the basement, they demanded $15,000.

A Picture-Perfect Resolution

In a denial of liability letter, our claims team reminded the Cliffs that a residential home inspection is a non-invasive, limited, visual inspection and snapshot in time. Inspectors can’t predict future conditions or life expectancies.

Quoting the claimants’ demand letter back to them, our claims team said, yes, the furnace looked very different on inspection day, as the original inspection photos showed. But that’s exactly the point. Conditions change, and if clients don’t follow their inspector’s advice, there’s nothing the inspector can do to prevent changes for the worse.

Our claims team also compared photos of the live wire. Per the inspector’s photos, they pointed out where the wire was tightly tucked away, not dangerous or exposed like in the Cliffs’ photos. The inspector couldn’t warn about a defect that wasn’t visible or problematic three months prior.

If the Cliff family were to pursue the claim further, they would have received no more than twice the inspection fee ($365). The case would also go through binding arbitration, as outlined in the inspection agreement’s dispute resolution clause.

Fortunately, the claim stopped there. Between the inspector’s exceptional photo evidence and the $730 limitation of liability, the Cliffs must’ve realized the case was a lost cause. They received the denial of liability letter and were never heard from again.

How can home inspectors use thorough photography to protect their businesses from meritless liability claims?

Home inspection claims can take years to resolve. This one was resolved in two months. How? His home inspection photo evidence did most of the heavy lifting.

As this case study shows, inspection photos are a powerful risk management tool. Because home inspections are visual by nature, photos capture an inspector’s-eye view of everything you saw (and didn’t see) at the time of the inspection. Without good photos, it’s your word against your client’s. And yet, most home inspectors aren’t taking enough photos, or the right ones.

Here are five ways to level up your photo habits and tackle claims with ease, like this home inspector did.

1.     Photograph more than just defects.

Only take defect photos, and you could miss easy opportunities to better educate your clients and document evidence for claims. Be like the inspector in this case study and also take photos of:

• Non-defect areas and components, like the photos of the functioning furnace.
• Representative shots, like the inspector’s wide-shot photos of the basement.
• Concealed or inaccessible spaces. Don’t just disclaim inaccessible or concealed spaces. Take photos of whatever’s obstructing your view or access.
• Macro vs. micro views, showing the property from far away and up close.

2.     Diversify your equipment.

To make your job easier, consider investing in additional equipment like body cameras or 360 cameras. Though they aren’t necessary, many inspectors find them valuable for collecting home inspection photo evidence. This evidence can help dismiss frivolous claims quickly and easily.

3.     Save inspection documentation for at least seven years—but ideally indefinitely.

You might be thinking, “Won’t all those photos make my report 300 pages long?!” The answer is no because you don’t have to include all of them in your report.

If some of these photos feel supplemental, hold onto them for safekeeping in your broader inspection archive. Storing your past photos, videos, reports, and signed pre-inspection agreements means you always have supporting documentation for:

• Customer service inquiries, like if a client asks a question about the inspection three months after.
• Future reference, like as a tool for training your employees.
• State requirements, if your state has a minimum time for storing assets.
• Claims, like in this case study.

Today, claims experts suggest saving inspection documentation for aminimum of seven years. Better yet, with cloud storage growing more convenient and common, we encourage inspectors to store their inspection documentation indefinitely.

4.     Set aside time for quality.

Quality beats quantity every time. But with today’s technology, why can’t we have both? Photos and videos don’t do you, your clients, or your claims team any good if they’re blurry and rushed. So invest in good photography equipment and give yourself plenty of time to use it.

5.     Review your photos while writing your report.

Missing a visible defect because you didn’t photograph it? That would be rough. But photograph a visible defect, put the photo in your report, and forget to comment on it? That’s bad, too. Just read this inspector’s story at inspectorproinsurance.com to see how unreviewed photos and videos can work against you, despite your best intentions.

You can easily take hundreds of photos during every inspection. Protect yourself and review them carefully while writing your report. Otherwise, you could miss crucial details—details that come back to bite you, if your client files a claim.

Your photography equipment deserves protection, too.

Photos are an easy and inexpensive way to boost your customer service, train new inspectors, and protect your business from frivolous claims. And yet, many inspectors forget to cover something essential: the expensive cameras and computers that bring those photos to life.

If you’re an ASHI member insured with InspectorPro, ask a broker or team member about equipment coverage through the ASHI Advantage. Also known as inland marine coverage, equipment coverage protects your tools at any location. Plus, when you purchase $10,000 in equipment coverage with the ASHI Advantage, we’ll automatically double your limits of liability to $20,000 at no extra charge. Not insured with us, but want to be? Visit inspectorproinsurance.com to apply for a free quote.