Home insurance inspections occur for many reasons, but you’ll likely need one when obtaining or renewing a home insurance policy. These inspections help insurance underwriters assess the risks of insuring your property.
Insurance inspections are not as comprehensive as a standard home inspection done by potential buyers, but they still offer valuable insight into the condition of your home.
Purchasing a new home is an exciting event, but to turn it into reality, there are still hurdles to clear. Your mortgage lender will require insurance coverage before signing off on the loan. Your independent insurance agent will write the application, and the company will issue an insurance binder.
The insurance underwriting process can take up to 30 days or more to finalize, often weeks after the closing, and the new owner takes possession of the house and all its potential underlying red flags.
A full inspection is typically carried out when a buyer considers purchasing a property. This allows an inspector to evaluate it from top to bottom, looking for any structural or safety issues that might affect the decision to purchase.
The inspector’s detailed report can allow the prospective buyer to address major issues and safety concerns that could affect their ability to obtain proper homeowners insurance policies.
On the other hand, insurance home inspections usually involve a more specific assessment focused on assessing potential risks for insurance purposes. The exact scope of these inspections can vary depending on each case’s unique needs and circumstances.
What is a Home Insurance Inspection?
A home insurance inspection is part of the insurance company’s risk evaluation during underwriting. Essentially the inspection is the insurance company’s due diligence to ensure your home meets the standards for insurance coverage.
According to ValuePenguin study, most home insurance claims resulted from wind, nonweather water damage, hail, and weather-related water damage from an analysis of Travelers Insurance policyholders. These five causes comprise 71% of all homeowners insurance claims.
Wind, nonweather water damage, hail, and weather-related water damage also account for 61% of the most costly claims filed.
There are 4 main types of home inspections for insurance purposes.
- Exterior inspection
- Interior inspection
- 4-point inspection
- Wind mitigation inspection
The exterior inspection (drive-by inspection) is the most common and often doesn’t require an appointment. Your insurance company will notify you of the inspection (usually by mail).
In an exterior home inspection checklist, your insurance inspector will be looking for the following:
- The age and condition of the roof
- Exterior hazards like uneven surfaces that could pose a tripping hazard, broken steps, missing handrails, and overhanging trees
- Exterior property such as playsets, swimming pools, fences, or other structures could potentially incur property damage
- Drainage around the home
- Basement & foundation integrity
- Age & condition of any HVAC system
- Condition of chimneys
This inspection allows the inspector to look at the property’s exterior and often measure the outside to verify square footage. The inspector will examine the roofing material, flashing and trim, windows and doors, siding, and other relevant exterior components from the ground.
They will also make note of any large trees or branches that could potentially cause damage to the home. The inspector will also note safety hazards like uneven pavement, broken handrails, swimming pools, trampolines, and aggressive dog breeds.
Additionally, inspections may include looking at decks, patios, other outdoor structures, and drainage systems.
The exterior inspection often only takes about 15 to 30 minutes on-site. The inspector then completes an inspection report for the insurance company to finish underwriting your policy.
Sometimes, an insurance company may order an interior inspection. Interior inspections require an appointment with the homeowner; therefore, this inspection type is not as common.
Some of the common events that trigger an interior inspection:
- A failed exterior inspection
- Recent interior renovations
- Any home over 30 years old
- Home value homes over $1 million
- Homes in gated communities that require an appointment
Insurers are more likely to ask for an interior inspection of older homes since they may not abide by the most current building and safety codes.
An interior inspection is typically more detailed than an exterior and includes checking the condition of
- Walls, ceilings, and floors
- Windows and doors
- Plumbing fixtures and systems
- Electrical system, including panels and wiring
- Evidence of structural damage like cracks and uneven floors
- Water intrusion
They’ll take photographs to document any existing conditions and provide a thorough report with their findings. Also, mold growth, fire risks, and structural issues are commonplace sights that could cause your premiums to rise or even prevent insurance coverage entirely.
Meanwhile, installing home security systems, deadbolt locks, selected fire alarms, and smoke detectors might benefit you. Not only could these provide enhanced protection for your family, but they may also drastically reduce the cost of premiums.
The interior inspection often only takes up to 1 hour on-site. The inspector then completes an inspection report for the insurance company to finish underwriting your policy.
A 4-point inspection delves deeper into your home’s four key systems associated with an insurance policy.
During a 4-point inspection, insurance companies seek information on the following systems:
- Roof condition and approximate age. Insurance companies often frown on shingle roofs over 20 years old as they have a higher risk for roof leak claims.
- electrical systems, including the type of wiring and electrical panel brand. Some old breaker boxes are seen as uninsurable.
- Heating and cooling system age and condition, including the ductwork.
- Plumbing fixtures and systems, including water heaters and piping.
Insurance providers may require a 4-point inspection on any residence over 30 or 40 years old before granting an insurance policy.
In Florida, the age limit for this type of assessment is reduced to only 20 years and is becoming standard before obtaining insurance coverage.
During a 4-point inspection, a professional home inspector will pay special attention to your roof. They’ll assess its age and examine it for any potential leaks or missing shingles. Notably, some insurance companies in Florida may take issue with roofs older than 15 years old.
Therefore, if possible, you should try to replace your roof before proceeding with an inspection to avoid facing insurmountable objections from the insurer.
When assessing the wiring in a property, insurance companies often refuse to insure houses with aluminum or knob and tube installations. The reason is that they are outdated systems with extreme fire risk; as such, their use is discontinued from residential constructions altogether.
When assessing your plumbing, an inspector may examine the pipes for leaks or other issues. The actual material of the pipes is also essential, as some insurance providers won’t insure an older home with polybutylene (PB) piping due to its higher likelihood of failure.
Additionally, they’ll take particular interest in evaluating your water heater and any wood stoves/fireplaces that don’t meet safety codes when examining the heating elements within your house.
The exterior inspection often only takes about 15 to 30 minutes on-site. The inspector then completes an inspection report for the homeowners insurance company to finish underwriting your policy.
The 4-point inspection often only takes 1 to 2 hours on-site. The inspector then completes an inspection report for the home insurance company to finish underwriting your policy. The 4-point inspection is paid for by the insured and costs between $150 to $350 or more for larger houses.
Wind Mitigation Inspection
Wind mitigation inspections may be optional, yet they offer an advantage that cannot be overlooked – the potential to reduce your homeowner’s insurance premiums. In other words, a wind mitigation inspection is incredibly beneficial and should not go unchecked.
Many Florida professional home inspection companies offer inspection packages that include a wind mitigation report for the insurance provider.
A wind mitigation inspection is an inspection of a home’s construction to assess its resistance to damage caused by strong winds. It typically includes the evaluation of the following:
- Roof and exterior wall connections (hurricane roof-to-wall strapping or brackets)
- Roof shape and size
- Roof covering materials
- Window or door shapes and sizes
- Presence of hurricane shutters
The results of a wind mitigation inspection can help you save money on your insurance premiums and assist with repairs needed to strengthen the roof structure.
Insurance companies conduct wind mitigation inspections to evaluate a home’s ability to endure hurricane-force winds and foreign objects entrained by the wind. If your residence can withstand these high winds, you may be eligible for discounted rates in states such as those on the Atlantic or Gulf Coast that experience hurricanes.
Because these are optional inspections for lowering rates, the homeowner pays for the wind mitigation inspection. The 4-point inspection often only takes 1 to 2 hours on-site. The 4-point inspection is paid for by the insured and costs between $150 to $350 or more for larger houses.
How to Prepare for a Home Insurance Inspection
An insurance inspector may or may not provide advance notice of their arrival. Preparing for a home inspection for insurance is similar to preparing for a typical home inspection. A successful home inspection for insurance ensures that all potential risks are identified and that you have adequate coverage for future damages or repairs.
The main areas an insurance inspector is looking at include:
- Basement: Inspect for foundation cracks and signs of water damage, mold, or mildew.
- Attic: Check for water damage and evidence of pests.
- Roof: Clear away debris, replace missing shingles, and check the chimney for cracks or missing bricks.
- Gutters: Clean out debris and ensure that all units are securely attached.
- Doors and windows: Test locks on all doors and windows and check for broken seals.
- Walls and ceilings: Look for cracks, stains, or water damage.
- Safety: Test smoke and carbon monoxide detectors and verify the expiration dates on fire extinguishers.
- Systems: Inspect and address any outstanding plumbing, electrical, and HVAC issues.
Once the inspection is complete, ask the inspector for a copy of the report so that you can review their findings and make any necessary changes or repairs. Your home insurance company may also require certain improvements for your policy to remain effective.
It’s important to remember that a home insurance inspection does not replace a full home inspection which may be necessary before buying a property. Home insurance inspections assess potential risks for insurance purposes and may not cover all possible issues affecting a home buyers purchase decisions.
How to Expect After a Home Insurance Inspection?
After the insurance inspection, your home insurer will review the findings and decide whether any modifications need to be made to your home insurance policy.
The results of an underwriting investigation can lead you down one of three paths:
- No changes are necessary.
- Alterations must occur – these are repair items you must complete before a deadline.
- Cancellation – the insurance company can cancel the policy coverage.
According to PolicyGenius, if you fail your home inspection for insurance, it’s not the end of the world. Your home insurance provider usually allows you 30 days (sometimes longer) to make necessary repairs.
Will My Home Insurance Rate Change After the Inspection?
It is possible that your home insurance premium may change after an inspection, depending on what the inspector finds. Your insurer may raise the cost accordingly if they find anything that increases the risk of damage or injury.
You may pay more for coverage due to discrepancies in home characteristics from what was reported on the policy application form, such as if you reported lower square footage or did not report a swimming pool or trampoline.
Conversely, if home improvements such as replacing a roof or installing a security system have been done to your home recently, that might get you a reduced rate!
What if My Policy was Canceled Due to a Failed Inspection?
If your insurance company cancels your policy over a failed inspection, you must address the deficiencies before applying for a new policy.
Taking the necessary precautions before buying a homeowners insurance policy, like knowing what to look for in an inspection and resolving any potential issues immediately, can help you avoid your policy lapsing.
Even if your examination is unsatisfactory, there are measures that you can take to ensure that it doesn’t come down to that – such as addressing all repairs proposed by the inspector.
After receiving a cancellation or non-renewal notice due to an unsuccessful homeowners insurance inspection, you can always apply for another home insurance policy.
However, you must find and start new coverage with another insurer before the prior one officially cancels your existing policy. Otherwise, there’s the risk of being left without protection during this time.
It is essential to quickly address any issues that caused a prior policy cancellation, as potential insurers will likely do their own home inspection. This way, you avoid having similar drawbacks resulting in another rejection.
- Home insurance inspections are necessary to assess risks and evaluate a property’s condition for the underwriting process to provide valuable information that the property meets minimum insurance requirements.
- There are four main types of home inspections for insurance purposes: exterior inspection, interior inspection, 4-point inspection, and wind mitigation inspection.
- Exterior inspections focus on the property’s exterior hazards, including the roof, exterior property, and potential tripping hazards. Interior inspections are more detailed and thoroughly examine walls, floors, electrical systems, and plumbing fixtures.
- 4-point inspections focus on four key systems of the property, including the roof, electrical systems, heating and cooling systems, and plumbing fixtures and systems.
- When renewing or seeking new coverage, insurance companies may require interior and 4-point inspections for older homes and those in Florida and certain areas along the gulf coast due to the high risk of hurricanes.
- Wind, hail, and weather-related water damage claims are some of the most costly insurance claims. So it’s no wonder the roof’s condition can scare many insurance companies from writing insurance policies. Most insurance companies will avoid insuring a house with a roof over 15-20 years old.
Home Insurance Inspection FAQs
Is it normal for home insurance to do an inspection?
Yes, it has become normal for home insurance companies to inspect a home before providing coverage in recent years. This helps them assess the risk of insuring the property and determine the premium rate they’ll charge for their services.
Why does my insurance company want to inspect my house?
Your insurance company likely wants to inspect your house to assess the liability and risk of insuring it. They will want to evaluate the home’s condition, identify potential risks or hazards, and verify that you adhere to policy guidelines.
The inspection results help them determine the home’s replacement cost, which is how they determine your insurance premium and whether or not they should offer you coverage.
Can my homeowner’s insurance be canceled after an inspection?
Yes, an insurance company can cancel a policy if the inspector discovers major issues during your home insurance inspection, such as a roof needing replacement.
Most insurers will give you 30 to 90 days to resolve any issues; however, if you don’t provide evidence of the problems being fixed before the deadline, they may send out a notice of cancellation and end coverage on an allocated date.