When you’re searching for home insurance, insurance agencies may request to inspect the home before signing you onto a policy. If it’s a new home, you probably already had it inspected before purchasing. So why do insurance companies bother inspecting a home?
Insurance agencies are primarily looking for risks. During an inspection, they may encourage you to increase the safety of your home with fire alarms, burglar alarms, etc. Insurance agencies don’t want you to have to file claims concerning avoidable perils.
Do Insurance Companies Require a Home Inspection?
Some insurance companies do, some don’t. This depends on the insurance company and the situation. There are many reasons an insurance company may ask to inspect your home. If the dwelling is older and hasn’t been inspected for a few years, it may not meet the correct standards. In this case, you’ll have to update your home to be compliant with city and state regulations.
What Do Insurance Companies Look for in Home Inspections?
The insurance company will seek out any safety improvements that can be made to your home. They look at the condition of the property, including:
Insurance companies also work to identify the replacement cost of your home. This cost considers expenses such as labor, materials and unique features of your home should the dwelling need to be rebuilt. The home’s market value is a different entity to the replacement cost, which is determined in part by a home inspection.
- Alarm systems
- Roof condition
- HVAC system
- Gutters/water drainage
- Electrical system
- Physical foundation
- Asbestos, lead paint and other common danger aspects of older homes
What if My Home Fails a Home Inspection?
Your home can’t technically fail a home inspection. The home inspection is simply the insurance company’s way of deciding the value of your home, possible necessary updates and how much insurance coverage you may need. Even if the home is in bad shape, the insurance company will likely still sign you onto a policy. They may require you to update your home to fit current regulations, however.
An insurance company may ask that you complete certain tasks. If you don’t comply with their updates, there’s a chance your insurance company could drop you due to the high risk the property may present. Speak with an insurance agent about the risks within your home and never hesitate to get a second opinion.