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How to Prepare for a Home Insurance Inspection

A home insurance inspection is how an insurer assesses the current condition of your home and its systems. Inspections help insurance carriers decide whether or not to insure a home and what rates to charge. Individuals can also use home inspections to decide whether or not to buy a home, but they'll have to pay for it.

During an exterior home inspection, the inspector examines the condition of your home's structure, outer walls and premises. During an interior home inspection, the inspector checks your home's HVAC, plumbing, electrical and other essential systems.

Find out how a home insurance inspection can help alert you to problems and get coverage that fits your needs.

What Is a Home Insurance Inspection?

According to the American Society of Home Inspection, a home insurance inspection is an objective examination of a house's physical structure and systems. The home insurance inspection process allows carriers to determine whether to insure a property.

A home insurance inspection is an objective examination of a house's physical structure and systems.

The insurer will schedule an inspection after a person applies for home insurance. The inspector will assess the home's condition and note any potential liabilities. Additionally, this home review will help the insurance company calculate your home's replacement value if a catastrophic event destroys the house.

Is a Home Inspection Required To Get Insurance?

Home insurance inspections are initiated at a carrier's discretion, typically to monitor a property's risks and avoid future liability for issues the homeowner didn't disclose in their application.

Home insurance inspections are usually initiated at the carrier’s discretion.

Insurers don't always schedule a home inspection for new applicants. For instance, carriers rarely ask owners of newer homes to get one due to a decreased risk of insurance claims.

Home insurance companies usually require a home inspection when a person owns an older home. On average, these residences have a higher number of claims with more expensive repairs. Some older homes also have significant risks because builders built these homes with materials less-resistant to fires and severe weather.

In short, certain situations may spark a requisite home insurance inspection, including:

  • A homeowner switches to a new home insurance carrier

  • An applicant owns an older or aging home

  • An insurer can't pinpoint the replacement cost value of a home or belongings

  • A homeowner hasn't had a home inspection within the last decade

What Do Home Insurance Inspectors Look For?

The home insurance inspector will search for ways to increase your home's security and safety by identifying potential liability risks like fire, mold, clutter or water damage.

Next, the home inspector will check for problems in the following areas:

  • Home's structure

  • Roof and chimney

  • Attached/detached structures (garages, sheds, fences, etc;)

  • Exterior grounds

  • Interior/exterior walls

  • Ceilings and floors

  • HVAC

  • Basements and attic

  • Interior rooms

  • Walls/siding

  • Windows and doors

  • Fire alarms and extinguishers

  • Security devices

Finally, the inspector will write about your home's materials, special features, construction and measurements.

How To Prepare for a Home Insurance Inspection

Your insurer will use the inspector's findings to determine your home insurance premiums. If the inspector identifies problems during the audit, your carrier may raise your rates or cancel the policy.

There are several steps you can take to prepare for a home insurance inspection.

9-Step Preparation for an Exterior Home Inspection

An exterior home inspection helps an insurer assess your home's replacement cost value, which is the amount to replace your house. This figure also helps the carrier calculate how much dwelling and other structures coverage your home needs.

You don't need to be present during an exterior home inspection. An inspector will photograph your home's exterior, and an insurance underwriter will later review these pictures for potential issues. The underwriter will use this information to recommend policy and coverage changes.

An exterior home inspection lasts two to three hours for average-sized homes. The inspector will search for roof damage, hazardous conditions and defects in the home's exterior.

To prepare for an exterior home inspection, take the following steps.

  • Outdoor premises should be clean and free of hazards.

  • Home exterior surfaces should have no water damage, mold, mildew or other issues.

  • The chimney should have no missing or loose bricks.

  • Foundation should be solid, even and free of cracks.

  • Trees should have no hanging branches that can damage your roof.

  • Windows have undamaged frames that seal completely.

  • Doors should securely attach to a frame and lock.

  • Roofs and gutters should be free of debris and have no loose, damaged or missing shingles. Sunken places may indicate damage.

  • Stairs and sidewalks should have all cracks repaired and hazards removed.

9-Step Preparation for Interior Home Inspection

During an interior home inspection, the inspector will examine the condition of your home's HVAC, electrical, plumbing and other areas to determine whether these systems require repair or replacement.

You must be present during an interior home inspection. These checks last 30 to 90 minutes, depending on the home's square footage.

An interior home inspection may follow your exterior home inspection. Take these steps to prepare for this review:

  • Ceilings should be free of mold, mildew, water damage and unevenness.

  • Utility systems should work. These include your plumbing, electrical and HVAC systems. Verify the last inspection date for each one. Poorly maintained systems can raise your home premiums.

  • Basement and attics should have good ventilation with no rodent or insect infestations. Search for signs of foundation seepage, water damage and roof decay.

  • Living spaces should be clean and free of hazards.

  • Bathrooms should be clean. Check for mold and mildew, which may indicate water damage.

  • Plumbing should be free of leaks and work properly.

  • Fire extinguishers, fire and carbon monoxide detectors should have fresh batteries and work. Check the expiration dates of these devices, and replace them if they are older.

  • Interior walls should be free of cracks, bubbles and water damage.

  • Provide information about security systems, such as carbon monoxide sensors and fire prevention devices to qualify for insurance discounts.

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Types of Home Inspections

Home insurance inspections, including 4-point inspections, are done at the insurer's discretion. Carriers use these house checks to mitigate the company's liability exposure. The insurance company pays for home insurance inspections.

What Is a 4-Point Home Inspection?

A 4-point inspection is a quick evaluation that insurers request for new customers, especially those who own homes 25 years and older.

This home check focuses on areas within your house that have a definite lifespan, including:

A 4-point inspection is not comprehensive, nor does the process tell you which repairs you'll need to make. For instance, if an inspector determines that your roof needs repairs, you must hire a roofing company to learn which repairs you'll need. If your home fails the 4-point inspection, the home insurer won't let you buy coverage until repairs are completed.

The average price for a 4-point inspection is $50 - $200. Buyers shouldn't use the 4-point inspection process when shopping for a home since this inspection doesn't identify all risks a home poses.

Standard home inspections, such as whole-home inspections, are ones initiated by homebuyers. These inspections assess a property's quality to help shoppers make informed buying decisions. Homebuyers pay out-of-pocket for standard home inspections.

What Is a Whole Home Inspection?

During a whole home inspection, an inspector checks all utility systems, exterior and interior structures within a home. These comprehensive home checks, which last up to three hours, examine the following systems:

  • Plumbing

  • Electricity

  • HVAC

  • Chimney

  • Roof

  • Water and mold damage

  • Pests

  • Lead-based and asbestos

How Much Does a Home Inspection Cost?

On average, home inspections cost $242 to $421, depending on the house's square footage.

Square

Footage Cost

0 – 1,000

$242

1,000 – 1,500

$280

1,501 – 2,000

$290

2,001 – 2,500

$307

2,501 – 3,000

$323

3,001 – 3,500

$338

3,501 – 4,000

$365

4,001-6,000

$421

On average, a whole home inspection costs $350 for larger homes and $250 for smaller houses under 1,500 square feet.  The whole home inspection process helps homebuyers identify most risks before they move into a new home.

When the home inspector arrives, ask which systems will be inspected. Some areas, such as plumbing and sewers, may require a specialist examination if the inspection uncovers problems. Here are the average costs of specialist inspections:

  • Plumbing: $180 to $225

  • Sprinkler systems: $20

  • Water testing: $125

  • Radon testing: $150

  • Final walk-through inspection ($100)

  • Annual check-up: $250

  • Guest/Pool House: $250

Benefits of a Home Insurance Inspection

A home insurance inspection can provide homeowners with several benefits.

  • Home insurance inspections reveal hazards that may cause financial losses and safety risks.

  • This review process gives homeowners time to correct hazards and avoid costly insurance claims.

  • Inspections can identify whether home insurance premiums are too high or too low, and adjust them accordingly.

  • Home inspections can pinpoint discounts a homeowner may qualify for on their policy.

  • Home inspections can help renegotiate a new price on a home based on necessary repairs.

How To Select an Inspector

The Consumer Financial Protection Bureau suggests these tips to select an inspector.

  • Select an inspector with a reputation for providing detailed, honest assessments of a home's physical condition. You can get these referrals from friends and family members.

  • Choose an independent inspector that is accountable to you and will provide a complete inspection and honest opinion. Be wary of an inspector selected by a real estate agent. If someone else pays the inspector, the inspector may underemphasize the home's problems.

What Happens If You Fail a Home Insurance Inspection?

An insurance company may cancel your home insurance if the insurer believes your house is a high-risk property. You have several options if you fail the inspection process.

The inspector may give you a deadline to repair the identified problems if your home fails the inspection process. You must provide documented proof that you had the issues fixed, including photographs and receipts of all completed home repairs.

If a carrier cancels your home policy, you'll receive a cancellation date that gives you time to find coverage with another carrier. You may contact your state department of insurance if you can't find a carrier to insure your home. In some states, homeowners can sign up for a Fair Access to Insurance Requirement Plan that helps people who can't get covered by a private insurer.

Home Inspections and Homeowners Insurance

An insurer will pay for a home inspection, during which an inspector checks your property for issues that can impact your coverage. Insurers usually reserve inspections for older homes or homes that have an increased risk of claims.

If an inspection uncovers problems, the insurance company may require the homeowner to fix these issues. Sometimes, the carrier may raise your insurance rates or cancel your coverage after an inspection.

If you are unsatisfied with your home insurance plan, SmartFinancial can help you find better coverage. Get free home insurance quotes from carriers within your area by entering your zip code below to get started.

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