Home insurance remains one of the most important insurance policies an individual can have. According to data, at least 85% of U.S. homeowners have bought a home insurance policy, with more data showing that 5.3% of these insured homeowners make a claim annually.
One of the least-known parts of home insurance is the home insurance inspection. Home insurance inspections aren’t always necessary for getting a home insurance policy but are often carried out by insurance providers to examine the condition of interior and exterior structures in your home.
Before an inspection, you should ensure that you’ve checked the condition of your home, room by room, to spot any damage that the inspector might notice. But what happens if you fail this inspection?
Here’s what you need to know about home insurance inspections and how to prepare for one.
What is a Home Insurance Inspection?
A home insurance inspection happens when an insurance provider sends an inspector to your home to verify the details in your home insurance application are correct. The primary aim of the inspection is to ascertain that your property is in good condition and well-maintained.
Home insurance inspections help insurance providers unearth potential risks with your property that weren’t accounted for in your application. They also help reveal whether the replacement cost of your home is higher or lower than the insurance company’s original estimate, which may prompt them to adjust the premiums to make up for the difference.
When is a Home Insurance Inspection Required?
A home insurance inspection is not necessary when applying for home insurance. However, the following situations may prompt the insurance company to carry out an inspection.
You live in an older home
You haven’t had a home inspection in the past decade
The insurer can’t determine the replacement value of particular items
You’re switching insurance companies
An insurance provider can also prompt a home inspection when renewing your policy if any of the above conditions are met.
What to Expect During a Home Insurance Inspection
Once the insurance provider has requested a home insurance inspection for your property, the assigned inspector will contact you to request permission to inspect your property and schedule the inspection for a convenient date.
Home insurance inspections can be external and internal. If the inspection is only external, the inspector won’t require your presence on the property as long as they can access it. Conversely, if the inspection is internal, you must be on your property on the scheduled date.
After the inspection, you’ll receive a copy of the home inspection report sent to your insurance company. If there’s more information required or any concerns, the insurance company will contact you directly or through your insurance agent.
Most high-value homes get internal and external inspections. For this type of inspection, you must be present in your home. The insurance inspector will never access your property without your permission. As for external inspections, you also get a copy of the home insurance inspection report sent to your insurance provider.
The insurance company may opt for a digital home insurance inspection in some unique cases. This is a DIY process where you use a DIY inspection app approved by the insurance provider to take photos of your home using your smartphone and submit them directly to the insurance company.
Once you’ve submitted your photos, the home insurance agent will contact you to give the inspection report and ask any questions or raise any concerns about the inspection.
What Does the Home Insurance Inspector Look for?
Home insurance inspectors typically look for three things during a home inspection.
Opportunities to Improve Security or Safety
The inspector will look for liability risks or potential fire hazards in how you maintain your property. If your home is full of mold, unusual amounts of clutter, or signs of water damage, the inspector will take note.
If you plan on fixing any of these problems, it is helpful that you let them know.
Building Measurements, Special Features, Building Material Quality
The home insurance inspector will also take note of the building measurements, quality of materials, and any special features used in your home’s construction. These include high ceilings, marble or specialty floors, dormer windows, and other additional structures.
The inspector will also note whether you need specialized interior designers or architects.
Updates to the Electrical System, Heating, Plumbing, Windows, and Roof
The home inspector will check for updates to your heating, electrical system, windows, plumbing, and roof. They’ll also confirm whether everything is well maintained.
How You Can Prepare for a Home Insurance Inspection
With the home inspection scheduled, you can do the following to prepare yourself:
Check for cracks in the foundation or signs of mold, water damage, or mildew
Check for indications of insects or rodents and water damage in the attic
Replace missing shingles on the roof, remove debris, and examine the chimney for missing bricks or cracks
Test all window and door locks and ensure the seals are not broken
Test all carbon monoxide and smoke detectors and the expiry date of fire extinguishers
Inspect and correct outstanding HVAC, electrical, and plumbing issues.
The Consequences of Failing a Home Insurance Inspection
Failing your home insurance inspection can have considerable consequences for your home insurance policy or application. In the best-case scenario, your insurance provider may give you ample time to fix the issues and maintain your home insurance coverage.
In the worst-case scenario, the insurer may deem your property uninsurable due to the glaring issues detected on your property, leading to the cancellation or non-renewal of your home insurance policy.
If you have a mortgage and your home insurance policy is canceled, you can be at risk of foreclosure or force-placed insurance. Most mortgage contracts mandate applicants to have and maintain a home insurance policy. Therefore, if your policy gets canceled or non-renewed, you must seek a new policy immediately and update your insurance declarations page with your mortgage lender.
For most homeowners who fail a homeowners insurance inspection, you’re likelier to get coverage from an insurance provider specializing in high-risk properties or get coverage under Fair Access Insurance Plans.
These providers and plans typically cost more than a standard homeowners insurance policy but are often the only viable options if you cannot get another insurer to cover your home.
Talk to an Insurance Professional
Home insurance inspections are not meant to make accessing or renewing home insurance harder. Rather, they help improve your home’s safety, reduce risks, and potentially lower your premiums. Talk to an insurance professional and learn how to maintain or get the right policy.