What to know about insurance inspections

If 3-Point is in basketball, what is 4-Point?

These inspections play a critical role — not only in fulfilling insurance requirements but also in providing homeowners with invaluable peace of mind. There are a variety of inspections that buyers can do when assessing the home they plan to purchase. The ones that most infection companies want are (1) 4-Point inspection and (2) Wind Mitigation.

An insurance inspection is an essential procedure aimed at evaluating the condition of a home for insurance purposes. Insurance companies often require this assessment before issuing a policy, particularly for older homes or properties in areas susceptible to natural disasters. The primary objective is to identify potential risks or hazards that could precipitate future claims.

Key Components of an Insurance Inspection

The four point inspection focuses on 4 critical areas of your home to gauge its overall condition and identify any potential concerns:

• Roof Condition: To assess the roof’s age, materials, and overall condition, checking for any signs of damage or leakage. A robust roof is essential for mitigating weather-related damage.

• Electrical System: To inspect the electrical setup to identify any outdated wiring, potential fire hazards, or other risks. This includes a thorough evaluation of the electrical panel, circuits, and outlets.

• Plumbing System: To review the plumbing to detect leaks, water damage, or antiquated components that could cause issues such as mold growth or structural damage.

• HVAC System: To evaluate the heating, ventilation, and air conditioning systems are functioning optimally by checking the condition and age of the furnace and air conditioner.

If your home has problematic systems, or does not meet an insurance companies underwriting guidelines, you may be declined. If this happens, you can fix that issue, or contact another insurance company.  Common reasons that insurance companies won't insure older homes include:

• roof being too old or damaged

• aluminum wiring or knob and tube wiring due to fire hazards

• certain brands of electric panels including Federal Pacific, Zinsco, Challenger, and Slyvania due to fire hazard

• home without central heat and air

• polybutelene plumbing due to the high risk of plumbing bursts. 

• a hot water heater or AC unit that is on the older side 

If your home has one of these issues, be sure to tell your insurance agent up front so you get an accurate quote. There are insurance companies that will offer insurance, but exclude coverage for the problematic system.   For example, most insurance companies will not offer coverage on a home with polybutelene plumbing. Those few insurers that will cover a home with polybutelene plumbing exclude all water damage.  This means that if  the plumbing bursts and floods this home, the cost of repairs will be out of your pocket.  Often the only way to get insurance on a home with polybutelene plumbing is to accept this significant water damage exclusion. Expect to pay more for your insurance or have a more difficult time obtaining insurance if these flags are present.

If your home has not been updated or has an older problematic systems, consider updating them. Before purchasing an older home for the first time, be sure to check that you can find insurance that is affordable. When purchasing an older home, we recommend getting a 4 point inspection done first, and working with a reputable independent insurance agent.  They can help determine the cost of insurance and  advise whether the home is insurable.