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Home insurance provides a financial safety net if the unexpected occurs. But before an insurance company offers you a homeowners policy, it may want to conduct a home insurance inspection as part of its underwriting process to identify risks and appraise the home’s replacement cost.
Here’s what you need to know about home insurance inspections, including how to prepare for one:
- What is a home insurance inspection?
- Benefits of a home insurance inspection
- Is an inspection required to get homeowners insurance?
- What does a home insurance inspection check?
- Other kinds of home insurance inspections
- How to prepare for a home insurance inspection
- Reasons homeowners fail a home insurance inspection
- Can my home insurance rate change after an inspection?
What is a home insurance inspection?
Unlike a standard home inspection that assesses the overall condition of a property, a home insurance inspection evaluates your home’s replacement cost and ensures the cost is in line with the insurance company’s initial estimate. It’ll also identify any risks that you may not have listed on your policy application.
If the insurance inspector finds that your home’s replacement value is different from the insurance company’s initial estimate, your insurer may adjust your premium up or down. They may also require you to make certain repairs before they’ll underwrite your policy.
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Benefits of a home insurance inspection
A home insurance inspection doesn’t only benefit the insurance company. It can give you the peace of mind that your home is safe and structurally sound.
An insurance inspection might also uncover potential risks that could impact your claims. By addressing these potential risks upfront, you may end up saving yourself plenty of time and money.
Home insurance companies may offer policy discounts for features like working fire alarms and security systems, too. Your insurance inspector will identify these features during their inspection.
Finally, an insurance inspection will determine if you have the right amount of coverage for your home. That way you’re not overpaying for a policy or walking away underinsured.
Is an inspection required to get homeowners insurance?
Home insurance inspections are at the insurer’s discretion, but these companies want to avoid the risk of future claims as much as possible. They do that through home insurance inspections. So, while inspections aren’t always required, don’t be surprised if your insurance company requests one.
Some instances when an insurance company will require an inspection include:
- Your home is older.
- Your policy is coming due and you haven’t had an inspection in a long time.
- You’re a new customer.
- Your insurance company can’t easily determine your home’s replacement value.
What does a home insurance inspection check?
Your home insurance inspection may consist of an exterior and interior inspection. Although the checklist can vary from one insurer to the next, the main goal of an insurance inspection is to gauge risk and replacement cost if the home is damaged or destroyed.
To do this, your inspector will likely start with an exterior inspection. They’ll take a look at the roof, chimney, siding, and other potential hazards like nearby trees.
If necessary, they’ll follow with an interior inspection. Here, they’ll assess the home’s systems (HVAC, electrical, plumbing), appliances, walls, floors, and ceilings, among many other things.
You can expect your inspector to take notes and photos on these things during an insurance inspection:
|The condition and age of the roof||Cracks in ceilings, walls or floors|
|Chimney||Fireplaces or wood-burning stoves|
|Gutters and downspouts||Plumbing|
|Driveways, walkways, and patio surfaces||HVAC systems|
|Exterior doors||Kitchen appliances|
|Outdoor steps and railings||Kitchen and bathroom cabinets|
|Trees or other exterior hazards||Smoke and carbon monoxide detectors|
|Garages and carports||Electrical systems|
|Balconies, porches, and decks||Structural cracks in the interior walls|
|Cracks in the foundation||Water damage, rot, or decay|
|Garage doors||Mold and mildew|
|Fire extinguishers||Animal or insect infestation|
Other kinds of home insurance inspections
Depending on your location and insurance company, you may need to get a different type of home insurance inspection. Other kinds of home insurance inspections include:
- Wind mitigation inspection: If you’ve ever been in a hurricane or violent windstorm, you know the kind of damage it can mean to your roof and other areas of your home. A wind mitigation inspection makes sure your home is up to code and can withstand severe winds. If the inspection shows that your home is “windproof,” you may receive a discount on your homeowners insurance premium.
- 4-point home inspection: A 4-point inspection only looks at the condition of the four major systems in your home — electrical, roofing, HVAC, and plumbing. Insurers usually request this inspection for older homes due to the higher chance of liability.
- Full home inspection: A full home inspection dives deeper into all the areas of your home — inside and out. It’s a multi-page report that points out major problems in the home and often includes photos of water damage, mold and mildew, cracks in ceilings and walls, and animal or insect infestation. Your insurer will recommend a full home inspection if you’re buying or selling.
How to prepare for a home insurance inspection
Insurance companies will arrange for an inspection to ensure everything matches the details in your insurance application. Your insurer will likely notify you beforehand that an inspection has been arranged, especially if your home is older or very expensive.
An insurance inspection can take anywhere from an hour to several hours, depending on the scope of the inspection and the inspector.
Some things you’ll want to have on hand before the inspector arrives include:
- Documentation showing the square footage of your home
- Receipts for any updates or renovations you’ve made
- Photos or details about security and alarm systems
- Updates you’ve made to your HVAC system, plumbing, or if you’ve added a new roof
If you dream of a discount (and not an increase) in your home insurance premium, try making these repairs and upgrades ahead of time:
- Examine the chimney and order a cleaning if necessary
- Address any mold, mildew, or cracks in the basement foundation
- Clean out the gutters of debris
- Inspect the attic for signs of rodents or water damage
- Wipe down the windows, and make sure they’re not cracked and that their seals aren’t broken
- Verify the roof is in good shape
- Test smoke and carbon monoxide detectors
- Secure any loose knobs on doors and cabinets
- Make sure HVAC systems work and plumbing isn’t leaking
Reasons homeowners fail a home insurance inspection
You may do your best to prepare for an insurance inspection, but there’s always a chance you might overlook a thing or two and fail the inspection. If that happens, your insurer may deny coverage or cancel your policy. Take a look at some of the red flags that might cause you to fail an insurance inspection.
|Red flags||Reason for Failing|
|You don’t agree to the inspection||If you fail to agree to an inspection arranged by your insurer, you’ll likely fail your inspection and your insurer may cancel your coverage.|
|Obvious signs of water in the basement||You know you have water problems in the basement, but fail to fix the problem.|
|Ventilation issues or problems with the HVAC system||Poor ventilation, cracked ducts, and an HVAC system that doesn’t work well can cause respiratory issues and health problems.|
|Electrical problems||Frayed wires and an overloaded fuse box can potentially lead to a fire.|
|Leaky roof or missing shingles||Signs of mold in the attic and the potential for damage from water because of missing or damaged shingles.|
|Rotten wood from water damage or termites||Rotting wood can indicate termites or ongoing water damage.|
|Slow drains or major clogs||Slow sink and bathroom drains can be a sign of clogs or significant damage in pipes and plumbing.|
|Cracks in the chimney or a flue that doesn’t work||Cracks in the chimney or flues that don’t work correctly can potentially lead to a fire.|
|Doors that don’t close or windows that don’t completely latch||Doors that don’t close easily or stick and windows that won't latch can be a sign of a settling foundation.|
|Lack of safety measures||If there are no fire alarms or locks on the doors, you’re compromising security and safety.|
|Radon, carbon dioxide, asbestos, lead paint||All can lead to major health problems.|
|Building code violations||If you DIY’d a project or had a friend help with a renovation, you could be in violation of your city’s building codes.|
What if my existing policy was canceled due to a failed inspection?
Your insurer is required by state law to issue a written notice of cancellation due to a failed inspection. Depending on your state’s regulations, you should have at least 30 days to discuss the cancellation with your insurance company or correct any concerns.
Here’s what you can do to reinsure your home after a failed home insurance inspection:
- Make the necessary repairs within a specified time frame. If you do, your insurance company may offer to reinstate your policy or write a new one.
- Dispute the cancellation. If you feel your policy was canceled unfairly, you can dispute the cancellation, file a complaint, or request remediation with the department in your state that oversees the insurance industry.
- Shop for a new insurance company. If your coverage was canceled and your dispute was unsuccessful, start shopping around for a new insurance company. Understand that the new insurer will likely request an inspection, so make sure everything is fixed and in good shape. If your coverage was canceled for a reason unrelated to home’s condition — for instance, because you own a breed of dog with a reputation for being dangerous — shop around for a company willing to assume the extra risk.
Can my home insurance rate change after an inspection?
After an insurance inspection, your rate may go up or down. If your insurance company finds liabilities that weren’t considered in your initial policy, your rate may increase. Likewise, if features or characteristics in your home differ from those listed on the application, or if the replacement value is higher than initially anticipated because of rising home values and inflation, your rates may also increase.
On the flip side, making substantial home renovations and improvements, like remodeling your kitchen or installing a new roof, may lower your rates. Or, if you have the asbestos removed, painted the walls with lead-free paint, and replaced old wiring, your rate can change for the better after an inspection.
Disclaimer: All insurance-related services are offered through Young Alfred.