What It Means When Your Insurance Wants a Home Inspection

Your insurance company – either your existing insurer or a potential new provider when shopping for coverage – can spring a home inspection on you seemingly out of the blue. You may wonder what the point of getting an inspection is, especially if you’ve had coverage for years without one.

Insurance companies, especially in Florida, need to limit their risk to stay profitable. Home insurance inspections are an important way to achieve this goal. Keep reading to find out the specifics on home insurance inspections, including why you may need one now and what you can do to prepare for a home insurance inspection when the time comes.

Insurance companies inspect homes 1) to verify the house’s replacement cost and 2) to accurately assess the risk of the home. Although an insurer can order an inspection on any home, generally, older houses and houses in disaster-prone locations, like along the Atlantic or Gulf coasts, are targeted more often. An insurer will usually order an inspection during the underwriting process around renewal time or when you’re getting new coverage.

Insurance companies must manage and mitigate risk. Since they still need money while providing the protection they do, they can’t take on properties deemed too financially risky.

When performing a home inspection, an insurance company is looking for the likelihood of a claim spawning from a property. They also need to make sure your home has no preexisting issues before granting you a policy. And, they’re verifying that the dwelling coverage in your policy is sufficient to satisfy the home’s replacement cost – the amount of money it would take to rebuild it from scratch.

If a carrier deems that your house is too risky after an inspection, they can recommend ways to remedy your property to maintain coverage. If you don’t make the changes, they could raise your premiums, non-renew your policy, or cancel your policy.

Carriers are ordering more and more insurance inspections lately in Florida, especially. With the state’s soaring home insurance costs, providers are cracking down on the properties they cover in an attempt to keep premiums from rising even more and, in some cases, to continue to survive as businesses. 

There are a few types of inspections that an insurer could want that we’ll go over in-depth below:

A carrier can perform an exterior inspection to verify the dwelling coverage and other structures coverage in a policy you want. A certified home inspector will come and take measurements and pictures of the outside of your house.

Your insurer might order an exterior inspection if your house has recently undergone major renovations. Or, the public information on your property may be lacking or dated. 

For instance, if you haven’t had an exterior inspection in the past decade or so, your insurer might want an inspector to check out your property. Your provider may also want an exterior inspection on a brand new home if there’s little existing information on it.

During an exterior inspection, the inspector will be observing the condition of your house and the other structures on your property to verify those limits in your policy are accurate. They’ll also be looking for any visible signs of damage or wear and tear.

The inspector will examine your roof, chimney, walls, and siding to look for any cracks, leaks, and evidence of wood rot, termite damage, or rodent damage. They’ll also determine if you have any large trees on your property that could be dangerous if they were to fall.

You don’t necessarily have to be home during an exterior inspection, but your insurance provider should notify you ahead of time nevertheless.

During an exterior inspection, the inspector will look at:

Interior inspections are less common than an exterior one, but they’re still possible. If you’re home during an exterior inspection, the inspector may also just ask you some questions about the inside of your house instead of actually going in.

If they do need to go inside, an inspector will almost certainly want to look in the attic during an interior inspection. They’ll look for ventilation issues and leaks. They’ll also be looking for general issues around your house, such as mold, fire hazards, cracks in walls, and more. Some of these problems could raise your premiums or prevent you from getting coverage altogether.

On the other hand, having home security systems, deadbolt locks, and certain fire alarms and smoke detectors could benefit you. These could lower your premiums.

A provider may be more likely to require an interior inspection on an older home since they’re more likely not to be up to the latest building and safety codes. You’d need to be home for an interior inspection, so your insurer should notify you ahead of time. 

During an interior home inspection, an inspector will investigate your:

While an exterior inspection helps determine dwelling and other structures limits, a 4-point inspection is a deep dive into your home’s significant systems related to your policy. In Florida, 4-point insections are becoming the norm before acquiring coverage.

A 4-point inspection will encompass a thorough examination of your:

An insurance company may require a 4-point inspection on any house over 30 or 40 years old before giving a policy. In Florida, that limit may be as low as 20 years. 

During a 4-point inspection, the inspector will likely be very interested in your roof. They’ll want to know the age and inspect its condition. Any leaks or missing shingles could be a problem. Also, your insurance company may object to your roof if it’s too old. In Florida, some insurers have problems with roofs over 15 years old.

When looking at wiring, an insurance company may not want to cover houses with aluminum or knob and tube wiring. These are old-fashioned wiring systems that are no longer allowed in residential construction because they’re fire hazards. Certain brands of electrical panels are also forbidden.

Regarding plumbing, an inspector may be looking at your pipes to check for leaks. The building material of the pipes is also important. For example, some carriers won’t cover polybutylene (PB) pipes because they have a higher chance of failing. They may also want to check out your water heater.

Also, insurers may have a problem if the inspector finds a wood stove or a fireplace that isn’t up to code when inspecting the heating elements of your house.

During a 4-point inspection, an inspector will:

The inspector will submit a report to your insurance agent, if you have one, who will then give it to the underwriter at your insurance company. If you failed the homeowners insurance inspection, the inspector can give you tips and recommendations on how to remedy your home to make it eligible for coverage.

A wind mitigation inspection is usually optional. But, it may be the most helpful since a wind mitigation inspection can directly help you save on insurance premiums by law.

Insurance companies perform wind mitigation inspections to assess a home’s ability to withstand hurricane-strength winds and wind-driven debris in various ways. If your home proves to be sufficiently fortified, your insurance company will lower your rates in certain states, usually Atlantic and Gulf coast states that deal with hurricanes.

Besides making significant repairs, there are some things you can do to prepare for a home insurance inspection that will make it go smoothly and make your insurance company more confident in your ability to upkeep your home. You can:

A home insurance inspection should likely take an hour and a half or less, but it could take longer if you have a very large property or many unexpected problems. Monitor the communications with your insurance company because, as we mentioned earlier, they should let you know that they want an inspection conducted.  

If a problem is found, your provider may give you a window of time between 30 and 60 days to fix the issue before changing your coverage. While you’re making the changes, keep your insurer or insurance agent in the loop. 

If you’re not going to be able to make the changes to your property in the time window they specified, let your company or agent know, and they may grant you an extension. They ultimately want to keep you as a customer, and they can work with you if you work with them.