Real Estate Appraisal E&O Coverage
Data Search provides Errors and Omissions (E&O) coverage, for some of our appraisal products. All of our standard residential reports are covered by this policy. Land only, REO, construction, commercial, all review products, and multi-family appraisals are not covered.
The purpose of E&O coverage as it relates to appraisals is to protect the lender from negligence, either on the part of the appraiser contracted to do the work or by an employee in our office. Data Search does not employ any independent fee appraisers for the purposes of completing appraisals for our clients. All work is subcontracted to independent fee appraisers and or appraisal firms.
Our role is to maintain documentation for each appraiser (E&O and License), order the report, follow up the report, review the report against a set of guidelines, and send the completed report to our client; then pay the appraiser for their work. It is our responsibility to only assign work to licensed/certified appraisers that are in good standing and have the minimum required E&O coverage.
The actual E&O coverage that is provided for the above referenced appraisal types are as follows: The appraiser and/or appraisal firm contracted by Data Search is required to carry an E&O policy with not less than $250,000.00 of coverage. This protects the lender from an error, omission or negligence on the part of the appraiser or their firm that is the direct cause of a clients loss; in addition, Data Search provides and additional $10,000.00 worth of coverage that protects the lender from an error, omission or negligence on the part of one of our internal staff, that is the direct cause of the clients loss. This liability is extended to the "Client" identified on the actual report and binder and is conditioned upon their enforcing the promissory note and security instrument to the fullest extent provided by applicable law and taking all reasonable steps to protect the interest they may acquire in the real property described in this report. Claims can only be made when such loss is the direct result of the actual error or omission. Further, no claim can be filed if the client has or had prior knowledge of the error or omission and failed to disclose it to our office. We provide no coverage to the homeowner, under any circumstance, for an error or omission. If an error or omission is discovered and no client loss is imminent or the error or omission is not the reason for the loss, no claim can be filed. Once a claim is filed we reserve the right to take the time necessary to accurately and thoroughly investigate the claim. We do not commit to specific time frames as not all cases are the same and some take longer than others. We will continually follow up and keep the client informed throughout the process.
If a claim is filed, it must be in writing and accompanied by supporting documentation. Further, the client agrees to furnish us with any additional information from their files that we deem necessary to make an accurate and fair determination as to the damages and/or the validity of the claim. Failure to provide the appropriate supporting documentation at the time of filing could result in a denial for lack of evidence, and failure to provide such additional information could result in the forfeiture of coverage.
We are obligated to resolve any claim, efficiently and professionally. If a claim is found to be justified, we will take the necessary steps to correct the error or omission using the most economical means possible. If the error is the responsibility of the appraiser, we will act on behalf of the client and submit the claim to the E&O carrier of the appraiser and or firm. We will then act as an agent for the client to follow up and keep them informed as to the status. The findings of the E&O carrier are final and are not influenced by Data Search, other than we provide them with the necessary documentation that supports the clients claim. Data Search shall not be held liable should the E&O carrier of the appraiser deny the claim.
We do not provide any form of appraisal guarantees or guarantees of value and reserve the right to limit or remove coverage from any type of report for any reason with appropriate notice to the client. We reserve the right to deny any claim to a client whose account is currently 120 + delinquent.
