REIX: Real Estate Insurance Exchange - Alberta, Saskatchewan

We’re a non-profit organization which means that premiums are used to pay the costs of defending claims and surplus funds are used to keep premiums low.

2022 Breaks Claims Records for REIX: Safeguard Yourself Against Future Claims!

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2022 Breaks Claims Records for REIX: Safeguard Yourself Against Future Claims

 

A substantial increase in claims during the 2022 Policy Year has led REIX to caution subscribers to take measures to minimize such occurrences to prevent a potential premium increase.

The most recent claims year, ending this September 30th, was the highest in 11 years, with 103 claims total.

Key factors worth noting in the high number of claims is an increase in carelessness, miscommunication, and a lack of attention to detail when reviewing documentation.

Here are the top 5 actions subscribers can take to help reduce the number of claims:

  1. Review all documents, offers, and contracts two or three times before distributing. This includes (but is not limited to) reviewing the Title, MLS Listings, and RPRs. If anything seems concerning, investigate and verify the information. Do your due diligence.
  2. Review everything with clients to ensure they understand what they are signing, agreeing to, or offering. Ensure that your clients are aware of any risks they could face when they are giving instructions (such as risks with unconditional offers or risks of a deal collapsing).
  3. Follow up on every verbal conversation with an email confirming the disclosures that were made, instructions that were given, and risks that were explained.
  4. Do not make any representations or give advice on anything that is outside of your scope; encourage your clients to seek advice from a third-party professional.
  5. Do not rely on a previous MLS listing. Verify everything and have your sellers sign off on all the information and details you are inputting on the MLS listing/feature sheet. Additionally, if you are using AI technology to create your listing (or any other documents), ensure you are reviewing and verifying all the information for accuracy prior to posting or submitting it.

As soon as you become aware of a claim or a potential claim:

  • DO talk to your broker immediately.
  • DO report this to REIX right away; whether you are served with a Demand Letter, Statement of Claim, or a Civil Claim, there are deadlines for REIX to file a defense on your behalf.
  • DO gather all relevant documents related to the claim and prepare a detailed chronological summary of the background events and discussions giving rise to the claim, as soon as possible and provide all of this to REIX.

As soon as you become aware of a claim or a potential claim:

  • DO NOT admit responsibility, offer to pay money, or provide additional services without REIX’s consent, even if you think you have made an error or omission, as this may jeopardize your coverage.
  • DO NOT communicate, correspond, or produce any documents to any other party named in a lawsuit. Doing so may prejudice your defense and coverage.
  • DO NOT wait to report a claim or potential claim to REIX as this is wasted time and could harm the outcome. The sooner you contact REIX when you feel a deal is starting to go sideways, the better chance there is of REIX being able to help secure a positive outcome.

The most effective course of action is to proactively prevent such claims from occurring in the first place and ensure that you are acting responsibly while consistently fulfilling your obligations as a subscriber.

To quickly report the incident, REIX recommends bookmarking the following claims or potential claim link: https://www.reix.ca/claims/how-to-report-a-claim-or-a-potential-claim/.

To find out more information about how to avoid claims related to mortgages and rising interest rates, check out our blog entitled The Effects of Mortgage Rate Hikes on Housing: Crucial Insights for Real Estate Professionals for some helpful tips.

When questions or concerns arise, reach out to REIX at admin@reix.ca for support.

 

Multi-Factor Authentication on your business email account

If you already need a separate passcode (e.g. a code texted to your cell phone) to access your email  for the first time on a new device, or to view it on the web, then you already have this.

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Weekly backups for your business computer systems

Your computer systems, such as your PC and your phone, contain mission-critical data on them – regular backups are a simple and effective way to ensure disruptions to you and your clients are minimized in the event disaster strikes.

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Firewalls on your internet access

Almost all internet connections have a firewall built in to prevent people from freely accessing your home or business network, or worse, your computer’s files.  You most likely already have this in place, but we encourage you to familiarize yourself with the key piece of security equipment.

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Endpoint Protection (a.k.a. anti-virus)

An up-to-date endpoint protection software is key to keeping your PC safe from viruses – it’s simple to install and may already have it included free with your computer (e.g. Windows Defender). It scans files, emails, and more to make sure nasty viruses and code to infect your PC.

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Security and Privacy Liability

Provides coverage, including legal expenses and damages, for any claim made against you for any actual or alleged breach of privacy, damage to the computers or systems others, unauthorized disclosure of data, and more, arising out of your professional services.

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Data Recovery and Loss of Business Income

a) Pays for the expenses related to investigate, repair, and manage a cyber event, including but not limited to: damage and interruption by a computer virus or malicious code, accidental damage or destruction of data, and malfunctions.

b) Reimburses you for lost income as a result of a cyber event – subject to an 8 hour waiting period.

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Event Management Expenses

Covers the costs associated with a breach of your systems to ensure you meet the requisite privacy legislation requirements – including notification costs as well as credit monitoring and other support for affected clients.

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Data Extortion

Provides services and coverage for expenses related to cyber extorsion threats (e.g. ransomware) – including the costs to manage the event and, where necessary, pay the ransom.

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Social Engineering Fraud

This is coverage for your clients – it covers them for lost deductibles as a result of somebody using your identity and business relationship as part of a real estate deal to convince them to send their deposit to the wrong place.

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Security and Privacy Liability

Covers legal expenses and damages for any claim made against you for breach of privacy, damage to the computers or systems of others, unauthorized disclosure of data, and more, arising out of your professional services.

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Data Recovery and Loss of Business Income

Pays for expenses related to investigating, repairing, and managing a cyber event, and reimburses you for the income lost due to the event.

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Incident (Event) Management Expenses

Covers costs associated with ensuring you meet the requisite privacy legislation requirements post-incident — including notification costs, credit monitoring, and other support for affected clients.

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Data Extortion

Provides services and coverage for expenses related to cyber extortion threats (e.g. ransomware) — including costs to manage the event and if necessary, pay the ransom.

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Social Engineering Fraud

Covers the actions of third parties who fraudulently cause the diversion of deposit funds from a real estate trade.

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Multi-Factor Authentication (MFA):

Multi-step account login process that requires users to enter more information than just a password, like a code sent to their email or phone.

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Weekly Backup:

Copies your files to a safe secondary location for preservation in case of equipment failure or cyber incident.

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Firewall:

Network security device that monitors traffic to or from your network to prevent people from freely accessing your home or business network, or worse, your computer’s files.

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Endpoint protection (anti-virus):

Endpoint security system scans files, emails, and more to protect against viruses, malicious code, and other cybersecurity threats on your desktop, laptop, and mobile devices.

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