Residential Title Insurance

Residential Title Insurance

Insurance Audits

Those words tend to make business owners very uncomfortable.

I think it has more to do with the AUDIT part of it.

If you have Liability or Workers compensation insurance you will eventually be contacted by an insurance auditor hired by the insurance company to conduct an audit.

An insurance audit is basically a “checking of the facts” about your business. When your policy was issued, your premium was based on your estimate of variable rating information, such as payroll or sales. An insurance audit is performed to determine what the actual premium should be based on your company’s actual results.

This guarantees you have the proper amount of coverage in the event of an incident.

There are 3 types of audits and you may end up doing 1 type or all 3 over the course of your business life:

The first two types are basically the same, Phone or Mail-in.

Both of these types of audits consist of a form being sent to you for you to fill out with the pertinent information and then sending this information, and any verification sources, back to the auditor for processing and review.

In the case of a phone audit, the auditor generally requests an appt to go over the audit with you by phone. The auditor uses this call to clarify any items that require more detail.

The third type is the one that most people dread- The Physical audit.

This type requires you to set and confirm an appt for an auditor to come to your place of business or to your accountant’s office. The audit can take anywhere from 30 minutes to several hours depending on the size of your company, # of employees and how well you have prepared your books.

When scheduling the appointment, the auditor will provide you with a list of the documentation you will need to have ready for the audit.

Some items you may be asked to provide:

• Payroll records with overtime separated

• Job titles and descriptions

• Listing of corporate officers

• Subcontractor costs

• Subcontractor Certificates of Insurance

• Sales receipts

• Quarterly Federal and State filings

• Automobile information

The auditor then goes through all records and inputs the information into a software program (Auditors usually carry a laptop).

At this point you may be asked some questions. If you are unable to physically be at the audit be sure the person who is there can answer most, if not all, questions. Also be sure to provide a day and time the auditor can call you later to clarify any missing info.

Possible questions:

• In detail, what does your company do?

• Again in detail, what does each employee do?

• Commercial work or residential? Or both?

• What are your hours/days of operation?

When the auditor is done they should review the findings with you and may ask for you to sign a statement confirming they have done so.

Many auditors (if applicable) will advise you on how to better prepare for next year.

Once the auditor leaves the audit they will then re-review the information provided and double-check for spelling errors, etc. the audit is submitted for review and processing to your Insurance carrier. It can take anywhere from a few days to several weeks before you will find out the final results from your insurance company.

If you have questions during this waiting period, you should direct them ONLY to your insurance agent or broker. The auditor has no control or information about your audit once it is submitted for review.

Some helpful hints:

• Please remember, the auditor is an information gatherer only. They have no control over your account.

• They are just doing their job- be courteous and helpful

• Do not lie to the auditor- they may not catch it but someone down the line will and then you can be fined and/or canceled.

• If you repeatedly ignore appointment requests or continuously confirm, then cancel, appointments the auditor will be forced to file a Non-compliance report. In this case generally the insurance company will send you a premium bill that includes a hike of up to 30%.

Save everyone the time and irritation, just make and keep the appointment.

Don’t let the audit process stress you out. The auditor wants to make things as easy as possible for you as it makes their job easier as well.

About the Author

Christina Nelson is a Virtual Assistant and owner of Vital Office Solutions.

Title insurance claim?

Bought a commercial space 2 years ago.Last month had the planning dept. coming and said that this is residential zoned with all the docs supporting it. It was never recorded commercial in the county system…The previous owner was using it a store without the county knowing…She put an illegal door to make it official and now the count made me take it out. Now I only have access to my store for about 9 hours a day…the rest I am not allowed since I have to go through somebody else’s unit to get there.The title insurance company wrote it down as a commercial on the preliminary title report, even though it was never allowed and now I have no access to it. Do you think I have a claim? According to the county I cannot resale as a commercial..
I didn’t know it was zoned residential. Escrow company and title company took the previous owner’s word for it and gave it to me. It was introduced to me as a commercial with a bussinss running at the time. Escrow and title company didn’t research

The building was purchased to be used as a commercial building. A commercial title policy guarantees that it can be used for the intended purpose under existing law. Just as a residential policy guarantees that there are no laws against occupying the premises for the residential purposes. The zoning should have been disclosed in the title report and, if it was not, you have a title claim. Unfortunately, who reads the title report. If you do not have a title claim, I would pursue a claim against the title company as closing agent. Under there E&O insurance, they closed on a property knowing (actual or constructive knowledege) that you intended to use it illegally.

I would absolutely consult a competent real estate attorney on this one.

North Houston real estate, First American Title Insurance, L