Have you been asked to have your home inspected for a new insurance policy? Don't be alarmed. The primary reason is to make sure the policy's dwelling amount reflects the cost to rebuild the home in the event of a total loss. When you receive an insurance offer, replacement value calculation software is used by your insurance representative to estimate the home's replacement cost, or cost to rebuild from the ground up. The software is good, and often draws from public records, but every property is unique so the best way to validate the cost to rebuild for the homeowner is through an insurance inspection.
The other reason for an inspection is to see what kinds of hazards might exist, and whether they can be corrected. Inspectors are trained to recognize those conditions that raise the risk of a loss, such as roofs in need of repair or dangerous conditions not known from a phone conversation or web form. But as the entity who has the most to lose when risky conditions exist, many carriers insist on inspections to protect their interests.
It has become common for home insurance companies to conduct insurance inspections within 30 days of a new policy's inception date. Previously, insurance companies or the agent may have taken exterior pictures and or measurements of the property; today these are available on line. Now inspections often include a walk through of the interior as well.
The home insurance companies often outsource to licensed independent insurance appraisal companies such as Mueller Inspections. The inspection company will contact you directly to arrange for the inspection. Most inspections typically take about 30-45 minutes. You will need to be home for the inspection and should expect that the inspector will ask to see each room along with the basement and furnace. They will also take pictures of your home from both inside and outside.
There are two primary purposes of a home inspection:
1.To validate the replacement estimate calculated with a combination of public information and information you’ve provided, and,
2. To identify conditions where a loss might occur: safety items such as a deck with no handrails; or susceptibility to loss, most commonly water.
What will be inspected?
The inspector will generally measure external dimensions; property tax information is not always accurate. They will often ask about the age of the roof, will inspect gutters and downspouts to be sure they are connected properly, and review installation or updates to furnace, electrical system, and plumbing. If you have a dog, they may also ask questions about his temperament and may even take a picture of the pup if he is photogenic(dogs account for about 30% of personal liability claims payments nationwide).
If you are buying a house, be honest with your insurance agent if you are moving into the home right after the closing or if you are planning to remodel the home. Both situations can be addressed ahead of time but it is always best to handle while setting up the policy. An insurance company can cancel a policy for misrepresentation if there is major remodeling and/or you have not moved into the property. Underwriters don't like surprises. Honesty is always the best policy.
Benefits for you
Other benefits of a home insurance inspection can be that discounts are identified by the inspector that the customer was not aware of. For example, some homeowners with central fire and burglar alarms may also have low temperature sensors. Or the home has an automatic generator that we never knew about. These situations may prompt additional discounts.
When the home inspection is complete, it goes to the insurance company. An underwriter reviews the building coverage and will outline concerns (hazards) that need to be addressed with the homeowner. If action is needed, it is forwarded to the agent, who communicates any changes or concerns or requests from the carrier to the customer.
Having your home inspected helps keep the cost of insurance down. Companies that conduct thorough inspections get discounted rates on reinsurance which this is passed along to customer Reinsurance is the insurance that companies buy to protect themselves from large individual losses or many catastrophic losses.
The home insurance inspection can be a simple process providing peace of mind that your home is properly insured and that losses can be avoided by recognizing risk through the eyes of a professional.
If you would like to discuss your homeowners coverage with a Gordon Atlantic Insurance professional, please call us toll free at 800-649-3252. Prefer to type versus talk? Use the form at the top left of this blog.