In order to obtain a homeowners insurance policy, your home may need an inspection. Here's what you need to know.
Home inspections are common in the world of homeowners insurance. If your home is older or has not been inspected in a long time, you should expect an inspection after you purchase an insurance policy. Inspections assess risk indicators not surfaced in your homeowners insurance quote and verify the replacement cost of your home. This article explains what to expect from a home inspection and provides some tips on how to prepare.
The reason an insurance company might require a home inspection is liability and risk management. Insurance companies like to avoid — and be aware of — risk and inspections are an accurate way of monitoring it. A home inspection is an insurance company's way of avoiding future potential losses for liabilities that aren't listed on the initial application.
An insurance home inspection typically checks the condition of a structure's:
You might be required to get a home inspection if you’re a new customer, if your home has an older build date, or if the structure's replacement cost is difficult to determine or needs verification. An insurance home inspection typically occurs 30 to 90 days after the policy start date. Your home may require an interior inspection, exterior inspection, or both.
After the home insurance inspection, your homeowners premium may either increase or decrease. Your insurance company can also void your policy or provide a list of mandatory issues to fix if your inspection shows your home is too risky to insure.
An exterior inspection is a common insurance requirement for new customers with new homes. Insurance companies use exterior inspections to confirm the replacement cost of your dwelling other structures coverages. Dwelling coverage insures the physical structure of your home, while other structures coverage handles damage to fences, detached garages, pools, or gazebos.
Typically, you do not need to be present for an exterior home inspection. Your insurance company may use a third-party company to take photos of your home’s exterior. Underwriters at your insurance company will reference these pictures and recommend any necessary changes to your policy — this holds true for an interior inspection as well.
Although you’re not required to be present for an exterior home inspection, your insurance company should notify you of your inspection date.
Learn what to do in advance of an exterior home inspection.
Interior home inspections are commonly required for older homes. These structures' HVAC, plumbing, and electrical systems may be outdated, posing a heightened risk for an insurance company. In the event of a burst pipe or another covered claim, the insurance company would be liable for any damage.
You'll need to be present at the time of the interior home inspection. An inspection may take between 30 and 90 minutes, depending on your home and the size of your property.
Expect the inspector to check your home’s:
Like an exterior home inspection, any new discoveries can impact your rates. If unexpected liabilities are found in your home, your insurance company can raise your premium or nullify your policy. Depending on the risk, your insurance company may cancel your policy or give you time to rectify the issues.
Learn how to prepare for an interior home inspection.
It’s important to prepare your home in advance of your insurance inspection. Any liabilities discovered may result in increased premiums or policy cancellation. Below are tips for interior and exterior inspections.
An interior inspection will usually accompany an exterior inspection, requiring additional work. Set aside time before the inspection to complete the below steps.
Maybe. Do not specifically ask your insurance company if you’re able to get insurance coverage without an inspection — that will raise a red flag. However, if your home is new enough, there are no claims in your CLUE report, and you have no other outstanding liabilities, you might not be flagged for an inspection.
