To acquire or renew a homeowner’s insurance policy, your insurer will need to carry out a home insurance inspection for your home. It is a standard procedure.
A good homeowner’s insurance policy protects your home from many risks, such as theft, vandalism, injury, and natural disasters. Insurers must conduct a thorough property inspection and assessment to provide the insurance security you need for your home and properties. So, don’t be surprised if your insurer organizes a home inspection.
Here’s all you need to know about home insurance inspection.
What Is A Home Insurance Inspection?
A home insurance inspection is an ‘official’ assessment that an insurer carries out to examine the state of an apartment, house, or any other property used for residence. Usually, the insurer will inspect the home before closing the sale.
A home inspection is beneficial to both the potential homeowner and the insurer as they will get the full picture of the home’s condition. This is because a home inspection will assess the home’s condition, rather than its design features. This will generate significant benefits, including:
- Identify potential risks that can cause safety issues or losses.
- Identify areas that can make you eligible for discounts on the homeowner’s insurance policy.
- Ensure that the home is not valued too low or too high for insurance.
With this kind of information, both the insurer and you can address the issues and avoid claims. It also helps the insurance company to prevent future potential losses for unlisted liabilities.
Is A Home Insurance Inspection A Requirement To Get Insurance?
A home inspection is not a requirement to get homeowners insurance. It is a decision that only the insurance companies can make to enable them to estimate a property’s coverage requirements.
However, if you’re purchasing a home that is more than 25 years old, which hasn’t been inspected recently, the insurer will require a 4-point inspection to get a standard policy. Besides, lenders often recommend that you have a property inspected by a qualified home inspector before buying it.
Note that: a home insurance inspection is different from a home insurance appraisal. If you are selling a home, you’re required to have a certified home inspector conduct an assessment to determine the home’s value. Do not confuse inspections and appraisals because of their similarities.
What To Expect During A Home Inspection
A home insurance inspection can take 30 minutes or last for four hours, depending on the property’s size.
Once scheduled, the insurer will send a home inspector with a list of features they’ll need to check. A typical home inspection is called a 4-point home inspection, and focuses assessment on four parts of the house:
- Electrical system, and
- HVAC (heating, ventilation, and AC).
However, a 4-point inspection does not provide an in-depth assessment of the home to evaluate all the possible risks. As a result, you need to conduct a more rigorous evaluation when purchasing a house. You can categorize the assessments as external and internal inspection.
Exterior Inspection can include:
- Exterior structures: sheds, fences, decks, sidewalks, driveways, patios, and retaining walls.
- All walls, floors, ceilings, doors, windows, and frames.
- Drainage system.
- Structure of the home, including sidings and foundation.
- Cooling and heating system.
- Condition of roof, gutters, and basement.
- Potential for water damage.
- Sidings and other exterior surfaces.
Interior assessment can include:
- Heating and cooling system.
- Attic and upper crawl spaces.
- Doors, windows, and frames.
- Signs of insect or pest infestation.
- Ceilings, floors, walls, and insulation of all rooms.
- Electrical systems including, light switches and electrical outlets.
- Appliances and other interior features.
- Plumbing system, including sewage and system sump-pump.
- Anti-theft devices.
- Fire extinguishers, smoke, and carbon monoxide detectors.
- Water and molding damage.
- Lead-based paint and asbestos.
This list can increase or reduce based on the size type and location of the home.
What Do Home Inspectors Look For?
Figure this out: the home insurance inspector is there at the request of the insurer or the lender. What comes to your mind? There are things the inspector is there to look for, most of which would want to reduce the liability of the insurer as much as possible.
Here are three basic things:
First, the inspector will look for opportunities to increase the home’s value, or security or safety risks, which will translate to higher insurance or higher lending. This search includes typically potential liability risks and fire hazards on the premises.
Liability risks include:
- old water damage.
- unusual amounts of clutter, and
- fierce dogs.
Second, the inspector will take the home’s measurements, locate special features, and examine the quality of the home’s construction materials. They will take special notes on additional structures, high ceilings, dormer windows, improved floors, and specialized interior designers or architects.
Third, the inspector will examine recent updates to plumbing, electrical system, roof, windows, or heating. They have to ensure that everything in the home is well maintained.
These three items can potentially affect home coverage and premium rates.
After The Inspection, What Next?
After the home insurance inspection, the home inspector presents your insurer with a report and recommendations. The inspection can either increase or decrease the insurance premiums and a host of other things. This can depend on the following scenarios.
If the inspection does not disclose anything out of the ordinary, your policy will remain active if you already have one. Besides, if the inspector identifies anything that could risk your coverage, your insurer will notify you.
If the inspector determines that your home’s initial value is too low, your insurer will revise your policy, which is likely to increase your premiums. On the other hand, the premiums could reduce if the inspector finds out that the initial value was too high.
Furthermore, if identified, any previously unaccounted risks or threats can also affect your premiums. Your provider can void your policy or give you a list of mandatory issues to fix for your policy to continue.
A home may get discounts on coverage if there are additional features such as fire extinguishers, fire alarms, perimeter walls, and anti-theft devices such as alarms and good drainage.
How To Prepare For A Home Inspection
It would be best if you were well prepared before the inspection. To be ready, you need to:
- Have clear documentation showing your home’s square footage.
- Have precise details about interior design work.
- Document clear information about your water sensors, drainage system, alarm system, AC and water heaters, and any security features (to get you discounts on your premium).
- Clear documentation on the electrical system updates, plumbing, heating, windows, and the roof.
- Clear documentation of accident and fire prevention features.
Most importantly, ensure that you understand your home and all the features, both internal and external.
A home insurance inspection does not determine if you get a homeowners insurance or not. However, if you are buying a home, it is essential because it helps you to know the home’s risk areas before putting your money on it. It is also a way that insurance companies reduce their liability or loss on claims by ascertaining that every feature in the home is well-maintained, to reduce the risks.