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If you’ve recently purchased a home and are in the process of looking for property insurance, it’s very normal for an insurance company to conduct an inspection. Not all home insurance companies require inspections, but in certain cases, insurers may want to conduct an inspection for a variety of different reasons. Let’s take a look at why insurance companies want to inspect your home and how to prepare.

Summary

  • A home inspection is commonly done to assess the replacement value of your property and identify potential risks for future claims
  • There are different inspection types, like a standard home inspection and an insurance inspection
  • Home insurance inspections will vary depending on the requirements of the insurer

Understanding Home Inspections

Before we dive into why insurance companies want to inspect your home, it’s important to understand the difference between a standard home inspection and an insurance inspection.

Standard Home Inspection (Interior)

A standard home inspection is generally done when you’re purchasing a new home. It’s done with the intent to help the homebuyer get a better idea of the condition of the home and avoid any surprises and unforeseen repairs that may be necessary. This type of inspection is often called an interior inspection. However, the inspector can also choose to look at the outside. The inspector will identify the conditions of things such as:

  • Home’s heating system
  • Air conditioning system
  • Plumbing system
  • Electrical system
  • Condition of the roof
  • Attic and insulation
  • Windows
  • Doors
  • Foundation and basement condition

If the inspection reveals problems with the property, the inspector will itemize everything and recommend a course of action. You can then request the seller of the property to fix these or still proceed with the purchase if you plan to take care of the problems yourself.

Insurance Inspection (Exterior)

An insurance inspection is done to estimate the replacement cost of your home and to make sure it’s in line with the insurance company’s quote estimates. It’s also done to identify potential property risks that may have been left out during your application process. This is typically referred to as an exterior inspection.

If there are dwellings or certain property risks not mentioned during the application process but found during the inspection, your home insurance quote can come back higher. Different factors such as the size, location, and age of the home can impact the replacement cost estimate and your premium.

Reasons Why Insurance Companies Want to Inspect Your Home

Below are some of the most common reasons why an insurance company may want to inspect your home.

  • Process of Buying a New House
  • Switching Insurance To a Different Company
  • Recently Had Major Renovations or Additions to Your House
  • Major Change in the Value of Your Home
  • You Live In an Older Home
  • Insurer Can’t Figure Out the Replacement Value of Certain Items
  • You haven’t had an inspection in the past decade

What Does a Home Insurance Inspector Look For?

Each insurance inspection will vary based on the requirements of the insurer. However, the main purpose of an insurance inspection is to assess risk and get an accurate estimate for the replacement cost of the home. Generally, an inspector will start by looking at the exterior of a home. They will look at the roof, siding, foundation of the exterior, chimney, trees, and detached dwellings.

Important Note: Detached dwellings like garages or pole barns may carry an additional cost or require a rider to your existing insurance policy. If your home is larger or older, the inspector may request to do an interior inspection. 

With the interior inspection, they will take a look at things such as the home’s HVAC system, electrical, plumbing, floors, ceilings, appliances, and foundation.

Below are some of the common things you can expect a property inspector to take pictures of and look at:

How to Prepare for a Home Insurance Inspection

The insurer will coordinate a time to come out and inspect your property. They will validate all the information you outlined in your insurance application. Depending on the size and condition of your home, a standard inspection takes anywhere from 1 to 3 hours.

It’s important to have the following information before your inspector arrives:

  • Official documentation stating the square footage of the home (inspector will verify)
  • Any recent updates you’ve made to internal systems such as HVAC, plumbing, electrical, appliances, septic
  • Recent external updates you’ve made, roof, siding, foundation, windows, etc.
  • Upgrades to the inside of the home that impact the value, kitchen, living room, bedroom, bathroom (this may require receipts or invoices)

In addition to having the following information available for the inspector, you should take a look and perform your own home inspection to find any potential issues. You should inspect things such as:

  • Condition of your roof or chimney
  • Check for signs of mold or water damage
  • Make sure that electrical, HVAC, and plumbing systems work accordingly
  • Inspect the condition of your appliances
  • Test your smoke detectors
  • Check the condition of your windows and doors

If you find any issues with the following above, it’s recommended that you get them fixed before your inspector arrives. In certain cases, it can help you reduce your premium.

Important Note: It’s important that you review your current policy and see if you have any homeowners insurance exclusions you want to be covered.

Why Is the Insurance Company Taking Pictures of My House

Insurance companies take note of the condition of important internal and external parts of the house. They often times take pictures for documentation purposes in order to get a more accurate assessment of the condition of your home.

The condition of the home is examined closely by the insurance company in order to accurately price out your policy. At the end of the day, the insurance company is taking a risk of insuring your house. In exchange, they are paid a premium. If your house carries a higher risk of a future claim, it will carry a higher premium.

Can the Cost of Your Home Insurance Change After an Inspection

Unfortunately, this is a possibility. If your insurance company decides that your home is too risky to insure due to a failed inspection they can cancel your insurance policy. The insurance company is required by law to send you a written confirmation of cancellation and outline the reasons why.

Generally, you have 30 days from the time you receive the cancellation notice to discuss what you need to fix in order to get coverage. During this period you need to carefully note what you need to take care of in order to qualify for property insurance.

What to Do If Your Policy Gets Cancelled Due to Failed Inspection

If you failed your home inspection you have some options that can help you find coverage.

1.) You can shop for home insurance with a different provider that is willing to insure your home. There are insurance companies that are less strict and have different requirements that may extend coverage to you.

2.) Make the necessary repairs required by the insurance company within the state time limit. After you make the necessary repairs required by the insurance company, you can have an inspector come out again and reinstate your policy.

3.) File a cancellation dispute with the insurance company. If you think the insurance company made a mistake during the inspection, you can dispute the cancellation by filing a cancellation dispute.

Conclusion

As you can see, there are many unique reasons why insurance companies want to inspect your home. This isn’t a negative as it is comes at no cost to you. In addition, a home inspection may help you uncover potential issues in your home that you weren’t aware of. As a homeowner, you should review your property insurance coverages on a yearly basis to ensure that your coverages are in line with what you need.

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