A homeowners insurance inspection isn’t a universal requirement for securing coverage for your home.
However, for some homes, especially older ones and those that haven’t been inspected in some time, an inspection is a non-negotiable necessity for many insurers.
A homeowners insurance inspection identifies potential issues and allows homeowners to rectify them. If those problems aren’t resolved, the insurer may refuse to issue coverage.
In some cases, a home insurance company might only need an appraisal, which is similar in concept but not as thorough as a standard homeowners insurance inspection.
An inspection or appraisal conducted for another reason, such as the purchase or sale of a home, may meet your insurer’s needs in some cases.
Now that we understand what homeowners insurance inspections are and why they may or may not be required, let’s learn more about how they’re conducted and their role in allowing homeowners to secure the coverage they want and need.
Why Do I Need A Homeowners Insurance Inspection?
Homeowners insurance is a vital consideration for those about to purchase a home and current homeowners.
It’s a major financial investment, representing roughly a third or more of the average family’s total assets, according to the Federal Reserve.
While individual policies represent a much smaller slice of the typical insurance company’s finances, careful and thoughtful decision-making is one of the key factors that has allowed property and casualty insurers to prosper. Insuring a home with serious and potentially catastrophic issues is simply not a good business decision.
The inspection serves two basic purposes in an either-or situation. Either the inspection is passed and gives the insurer insight into the home’s condition, allowing it to craft an effective policy, or major issues are uncovered that disqualify the issuance of a policy, at least at that moment.
This process also allows homeowners to understand the scope of work that must be done to acquire home insurance, making the best use of potentially limited resources to complete specific repairs.
What Are The Benefits Of A Home Inspection?
In many cases, the issues that arise during an inspection won’t be major problems, but risks that could require more extensive fixes over time.
These concerns are easier and less expensive to repair than widespread damage, which means home insurance inspections can save money for homeowners as well. Although the process is required and initiated by the insurer, there are plenty of ways in which the homeowner can realize benefits as well.
A thorough inspection gives the insurer a complete, current, and accurate picture of the home in question. This can help homeowners by making it clear whether they qualify for discounts tied to home insurance policies.
Some common considerations include fire extinguishers, smoke, and carbon monoxide alarms, impact-resistant roofs, and even some more basic concepts such as not smoking inside the home can all lead to savings via discounts whose conditions can be confirmed by a home inspector.
Certain demographic factors, such as older homeowners being more likely to spend time at home and therefore potentially able to spot perils like fires more quickly, can also lead to discounts, as the Insurance Information Institute pointed out.
While not all of these discounts are available from all insurers, and some will offer other ways to reduce rates that are less common, the inspection will help assess many available discounts that are relevant for a specific home.
Homeowners will also benefit from getting an updated, detailed estimate of their home’s value. While this may not be an important consideration for those who just purchased a home or have had their homes recently assessed for other reasons, homeowners who haven’t had a reason to assess the house’s value in some time generally find this to be useful and beneficial.
These benefits, ranging from a greater understanding of the state of the home to guidance on what, if any, steps need to be taken to make a home insurable or apply a discount, can also help minimize unnecessary future claims. That, in turn, saves homeowners money and creates a long-lasting benefit.
What Is The 4 Point Inspection?
The four-point home insurance inspection is common in the insurance industry, although it isn’t a strict, unchanging format or approach used by all insurers.
Instead, it’s a blanket term that refers to a knowledgeable inspector, potentially but not exclusively a professional engineer, electrician, or contractor, checking four major areas of concern:
- Roof: The roof is crucial for protecting the interior of the home, and faces potential hazards ranging from ice and snow accumulation to hail, falling trees, and many other risks. The inspector will determine the integrity of the roof after a thorough review.
- Plumbing: Plumbing is mostly hidden within a home, but fills several vital functions. When plumbing breaks, it can lead to major damage to a home. Depending on the specific type of incident, a break may not be detected until hours or even days after it happens, amplifying the problem. The home inspector will review the state of your plumbing as part of the inspection.
- Electrical: Another vital element that is largely kept out of view, your electrical system provides a modern standard of living by powering a variety of appliances, electronics and other devices. Issues like worn components or a faulty wiring plan can put your home and your family in danger of serious perils such as electrical shock and fire. Checking the electrical system makes sure it’s safe and stable.
- HVAC: Heating, ventilation, and air conditioning systems keep homes comfortable and make them a refuge from extremes in outdoor temperature. These systems also have the potential to cause everything from water damage to fires if they aren’t properly installed and maintained. Your home inspector will review your HVAC system, or separate components in older homes, and make sure everything is operating safely.
Preparing For An Inspection
An inspection will be that much easier if you take some simple steps to prepare beforehand. Gathering basic information about the home that the insurance company likely won’t have prior access to will allow the inspector to focus more carefully on specific concerns based on the materials used to build the home and updates made since it was first built.
In general, it’s a good idea to bring together documentation that describes the layout and square footage of the home, such as floor plans. Supplementary information about renovations and interior design work are also useful for a home inspection.
Additionally, documents pertaining to upgrades or improvements made to the plumbing, electrical, HVAC, roof, and windows can be very helpful. Finally, try to make information about security systems or similar devices available, especially if the company offers a discount for these tools.
A clean, hazard-free appearance is also an important consideration for a home inspection. Very minor cosmetic repairs may not be necessary, but be sure to clear any fire hazards, replace or fix wobbly steps and railings, ensure clear paths exist between rooms, clean up excess clutter and any instances of mold, and look for other issues that may create a negative impression on the inspector.
While you don’t need to have your house as spotless as it would be if it were on the market, a general sense of cleanliness can only reflect beneficially on your home and lead to a positive impression on the part of the inspector.
Make The Most of Your Home Inspection
The idea of a homeowners insurance inspection may seem daunting or even make you nervous.
If that’s the case, just remember the many benefits that come from an inspection. Your home inspector can help you be sure of the discounts you qualify for, identify issues that you can address before they become more serious, and help you gain an updated picture of the value of your home.
Even in the relatively uncommon event that you need to make repairs before you can be insured, it’s more likely that these issues will be preventative changes or minor fixes as opposed to major, disaster-level problems that threaten the integrity of your home.*While we make every effort to keep our site updated, please be aware that "timely" information on this page, such as quote estimates, or pertinent details about companies, may only be accurate as of its last edit day. Huntley Wealth & Insurance Services and its representatives do not give legal or tax advice. Please consult your own legal or tax adviser.