This report summarizes Missouri real estate malpractice data for 1997 to 2006. The charts, graphs and tables are limited to closed claim information and were constructed from data collected by the department as required by Section 383.060 RSMo. The premium and loss data is presented in the final section.  This data was obtained from the Missouri Page 20 Supplement to the companies’ annual statements.

The loss ratio for real estate malpractice in Missouri during 2006 was 33 percent.  This marks the fourth time in the past ten years that the industry did not post a pure profit on all premiums.  Profits stem from corrections the industry has made for over-reserving on claims in previous years.

Of 58 claims closed in 2006, insurers paid an average of $6,433 per claim.. Closed claims, both with and without payments, decreased substantially from 2005.

Over the last 10 years, 607 real estate malpractice claims were closed in Missouri ─ 141 (23 percent) with payment and 466 (77 percent) without payment.

In 2006, the average loss adjustment expense for all claims closed with payment was $33,779.  The expenses for all claims closed without payment averaged $7,037.

In Section II, indemnities paid on closed claims are shown by claim characteristics.  The number of closed claims, average paid claim and total amount paid are included in each of these six categories:

• Area of real estate in which the claims were filed.
  
• Major activity in which the agent was engaged when the alleged error or omission occurred.
  
• Alleged error or omission that was the most significant reason for the claim.
  
• The legal disposition of the claim at the closing date.
  
• The number of years the insured had been in practice at the time of the alleged error or omission.
  
• The relationship of the insured to the claimant.

Four companies reported writing real estate malpractice insurance business in Missouri during 2006.  The four writers of real estate malpractice insurance in Missouri were Continental Casualty Company, St Paul Fire & Marine Insurance Co., United States Liability Insurance Co., Greenwich Insurance Co..   

This report was compiled using information submitted by the insurance companies.  As a result, the accuracy of this report is dependent upon the accuracy of each company’s data.  Copies of this report will be made available in braille, large print or on audio cassette upon request.  Questions regarding this report should be directed to the Statistics Section, Department of Insurance, Financial Institutions & Professional Registration, P.O. Box 690, Jefferson City, Missouri 65102-0690.

The Department of Insurance, Financial Institutions & Professional Registration
is an equal opportunity employer