Insurance companies base rates on risk, and part of determining that risk for your home insurance is by way of an insurance inspection. Whether you are purchasing a new home or switching insurance companies, an inspection may be necessary if your home is older or has not been inspected recently. Here is what you need to know about home insurance inspections and how to prepare for one.
What is a home insurance inspection?
In a home insurance inspection, a certified inspector will come out to your home to assess its risk potential for liability and future claims. The insurance inspection will also detail specifics about the home to create a valuation, which is useful to ensure the dwelling coverage is adequate in the event of a major loss. After the inspector shares the results with the insurance company, it will determine if coverage adjustments are needed and whether to continue the home insurance policy.
Home insurance inspections differ from a standard home inspection. Home inspectors will assess the home’s structure and appliances to help you make a decision to buy. Just like you can use standard home inspection results to decide whether to purchase it, an insurance company can use an insurance inspection to adjust your premium, require you to fix issues and even cancel the policy if it deems your home too risky to insure.
| Home insurance inspection | Standard home inspection |
|---|---|
| Requested by home insurance company | Requested by potential home purchasers |
| Used to determine insurance risk and mitigate liability exposure | Used to determine quality of home to make purchase decision |
| Can be used to change coverage, adjust premium or deny coverage | Can be used to adjust purchase price, request amendments or walk away from home purchase |
| Is free to the homeowner | Is paid for by the potential home purchaser |
Who requires a home insurance inspection?
Insurance companies typically order home inspections for older homes and in areas more prone to major natural disasters like hurricanes, although it can be done for many reasons or even randomly. If you have been with the same home insurer and have not had your home inspected recently, you may be required to have one completed prior to the next renewal period. If you are switching carriers, the new home insurer may require a home insurance inspection be completed within 90 days of the effective date of the homeowners insurance policy.
Lenders
Though lenders do not technically require home insurance inspections, you are required to purchase home insurance coverage as part of the mortgage process. Before you settle on the home or refinance an existing mortgage, you have to supply proof of homeowners insurance. Purchasing a new insurance policy or updating an existing policy could trigger a home insurance inspection.
Insurers
An insurance company will commonly require a home insurance inspection within the first 30-60 days of the policy start date to ensure the application was completed truthfully and accurately to the value and risk of the home. The inspection results could be used to make changes to your dwelling coverage and may require you to address issues with your home found during the inspection.
In some states, home insurance companies may conduct specified home insurance inspections. For example, if you live near the Gulf Coast, an inspector may need to complete a wind mitigation inspection. This type of home inspection could result in reduced insurance premiums or credits for installing wind mitigation features. While this is not a state mandate, depending on your location, this may factor into whether or not your insurer requires an inspection.
What a home insurance inspection covers
Some home insurance inspections do not require the homeowner to be present, like an exterior-only inspection. The inspector will take pictures and measurements of the home’s exterior to complete their report. An interior inspection requires you to be present and will include photos and measurements of the inside as well. The insurance company underwriters will review the inspector’s report to determine next steps based on the condition of the home.
Home insurance inspections look at the condition of:
- Any sign of infestation on interior or exterior
- Ceilings
- Chimney
- Doors
- Exterior items (barn, garage, shed, pool, etc)
- Fencing
- Fire alarms and extinguishers
- Flooring
- Gutters
- HVAC
- Plumbing
- Porches/decks
- Roof
- Security systems
- Walls
- Windows
- Yards
The primary considerations of a home insurance inspection are what kind of maintenance upkeep and liability risk is present with the dwelling and property.
How to prepare for a home insurance inspection
There are several ways you can prepare for a home insurance inspection. Walking around the interior and exterior of your home, you may be able to spot issues that could come up and fix them before the inspection comes, or at least be aware so there are no surprises later.
Here are a few things to look at when preparing for a home insurance inspection:
- Loose or missing shingles on the roof
- Unsecured gutters or debris inside and visible
- Cracks or loose bricks in a chimney
- Hanging branches over the home’s structures, especially dead limbs
- Cracks or leaks around doors, siding and windows
- Uneven sidewalks or chipped stairs, which could be a safety hazard
- Make sure carbon monoxide and smoke detectors work
- Pest or water damage in the attic or basement
- Any sign of leaks around plumbing fixtures
- Cracks or bubbling of the walls which could show water damage
- Changing the filter in your HVAC system and run it to make sure it works properly
What happens if you fail a home insurance inspection
If the inspector finds issues with your home’s interior or exterior after a home insurance inspection, your insurance company may give you a deadline to fix them to continue coverage. If it deems your home too risky, the insurance company may cancel the insurance policy. You have options if this happens.
If the inspection comes up with fixable issues, you will have a certain amount of time to have them fixed. The insurance company will want proof of work done, which could include receipts from work completed and pictures showing the finished project.
The decision to cancel your home insurance will provide a cancellation date, which will give you some time to find insurance elsewhere. If you cannot find an insurance company to insure your home, you may have to contact your state department of insurance to find programs available for high-risk homes. Some states have Fair Access to Insurance Requirements (FAIR) Plans in place to help people who cannot get coverage in the voluntary market.
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