Can I Get Homeowners Insurance Without an Inspection?
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Home inspections are not always required to buy homeowners insurance. Insurance companies decide on a case-by-case basis.
If your house is more than 25 years old and hasn't been inspected recently, your insurance company might require a 4-point inspection to qualify for a standard policy. If your home is currently under construction, other insurance policies can cover you before it's finished.
Is a home inspection required to get insurance?
Inspections aren't always required, but they can help insurance companies estimate how much coverage you need.
If your home is old or hasn't been inspected in a decade, the insurance company may insist on inspecting your home to consider potential risks, such as an aging roof or outdated electrical wiring. But there are no hard and fast rules about when a home might be inspected.
Allstate, for example, didn’t require an inspection to insure a standard and recently renovated house in New Jersey when getting a quote.
Home insurance inspections are more likely if your home is:
- More than 25 years old.
- Insured by a new company.
- Hasn't had an insurance inspection in 10 years.
- Is in a high-risk area that's vulnerable to hurricanes, wildfires or hailstorms.
The insurance company decides if it wants to inspect your home, based on risks your home may have and property information the company wants to know. For example, the company may want to see which safety upgrades have been made to an older home.
You can choose to refuse a home inspection by an insurance company. However, that could mean your rates go up or your policy is canceled.
Don't confuse your insurance home inspection with a real estate inspection
When you buy a home, a real estate home inspector works for you to help you understand the property and its issues. However, an insurance home inspector works for the insurance company to protect them from insuring a risky property.
How a real estate inspection works
How an insurance home inspection works
When buying a home, the buyer usually requests and pays for a detailed home inspection to check its overall condition and potential issues.
It's the inspector's job to help you understand the property you're buying. For example, they could find an issue with the furnace, and the repair cost could be included in your negotiation.
How a real estate inspection works
When buying a home, the buyer usually requests and pays for a detailed home inspection to check its overall condition and potential issues.
It's the inspector's job to help you understand the property you're buying. For example, they could find an issue with the furnace, and the repair cost could be included in your negotiation.
How an insurance home inspection works
An insurance home inspector works for the insurance company to find risks or safety issues that could lead to a home insurance claim. The inspection can affect your insurance rates or whether the company offers you a policy at all.
For example, if the insurance inspection finds an issue with your home's electrical wiring, they could charge you more for coverage. Or if they see a dangerous fence, they could ask you to fix it.
Potential buyers typically pay for a substantial inspection, known as a "whole house inspection," which examines all aspects of the entire house. These inspections often take a few hours and cover a comprehensive list of possible issues.
- Is it required? Home inspections are a standard part of the home buying process. However, they're rarely required by a bank or mortgage lender.
- How much does it cost? While an inspection may cost you a few hundred dollars, it could show potential risks in the house that could cost thousands of dollars to repair. So it's in your best interest to have an inspection before buying.
- What happens if you find problems? If your contract with a seller includes a home inspection as a contingency, you have the legal right to back out of the purchase if your inspection shows substantial damage the seller did not disclose.
Can I use an appraisal to get home insurance?
Sometimes your home insurance company may accept an appraisal when preparing your policy.
However, this is entirely up to the company's discretion. Appraisals are not always as thorough as inspections, so if your house is old, an inspection may be required.
What is it? | Can it be used for home insurance? | |
|---|---|---|
| Insurance home inspection | Done by your insurance company to look for risks | Yes |
| Appraisal | Typically ordered by your lender to determine the property value | Sometimes |
| Real estate home inspection | Done by a home buyer to determine the property's condition and needed repairs | No |
Appraisals are typically required when selling your home or applying for a mortgage or HELOC, and sometimes when refinancing your mortgage.
Since any flaws in your house, such as structural damage or mold, impact your home's value, there is some crossover between a home appraisal and home insurance inspection.
In most cases, an appraiser's goal isn't to inspect the safety of your home, but to determine its value.
One exception is a Federal Housing Administration appraisal. If you're buying your home with an FHA loan, the appraiser will perform "double duty," both estimating the home's value and evaluating the house to make sure it meets the Department of Housing and Urban Development's standards for health and safety.
This can mean that an FHA appraisal is more useful to insurance companies and more likely to be accepted instead of a home inspection.
Types of home insurance inspections
- Exterior home inspection: Can be done from the street or your property to assess your home, any accessory buildings such as sheds, and structures such as fences or pools. This is the most common type of inspection for new home insurance policies.
- Virtual home inspection: Can be done remotely with an insurance company using satellite images or drones. Virtual or photo inspections can also be done by a homeowner using the insurance company's app.
- 4-point inspection: A standard home inspection to check your roof, electrical, plumbing and heating/cooling systems. Four-point inspections are common for older homes with aging systems.
- Full inspection: Includes an interior and exterior inspection to check your home systems, such as plumbing and electrical, as well as looking at its structure, safety and potential liabilities. The inspection is most common for high-value homes.
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What to expect during a 4-Point home inspection
A 4-point inspection is typically brief and may be required when buying homeowners insurance — especially for a house that is more than 25 years old. It allows insurers to determine how much risk they would take by offering you a home insurance policy and how much to charge you.
For example, an inspector might notice that your plumbing is old, though still in decent working order, and factor the system’s age into your rate. Alternatively, the inspector might find a leak causing water damage to your basement ceiling. In this case, they may require that repairs be made before they approve you for a homeowners insurance policy.
4-point inspections focus on these four parts of the house:
- Roof
- Plumbing
- Electrical
- HVAC
These all have a finite lifespan. For an older home that hasn't been renovated, an insurance company wants to determine the risk of a claim in the near future. The inspector will inspect each element and determine its condition — old, new, professionally repaired or damaged.
The typical home inspector conducting a 4-point inspection is not qualified to do a detailed assessment of any repairs needed. For example, if an inspection determines that your aging HVAC unit needs improvement, an HVAC specialist would be required to identify exactly which repairs or upgrades are necessary. If your home fails the 4-point inspection, you might not be able to get homeowners insurance until issues are resolved.
A 4-point inspection is not in-depth enough to evaluate all possible risks associated with a home, so it should not be relied upon when deciding whether to buy a house.
What else might be covered in a home inspection?
A full home inspection could include a closer look at:
- Electrical systems: Is there any damage, such as fraying wires? If wiring is old, does it meet current safety codes?
- Plumbing system: Does the septic system have any drainage problems? Is the water pressure adequate?
- HVAC system: Does the furnace have any cracks? Is the air conditioning system efficient?
- Chimney: Does the chimney have any loose bricks or cracks that allow moisture to enter the house?
- Roof: Is the roof built to handle the weight of snow? Are any shingles damaged?
- Water and mold damage: Is there any black mold? Is the basement damp and likely to suffer from flooding and mold damage after heavy rain? Are there cracks in the foundation that may lead to leaks?
- Pests: Are there signs of termites or a rodent infestation?
- Lead-based paint and asbestos: If there are signs of either material, a specialist may be called to investigate.
Can I get home insurance if my house fails an inspection?
Yes, you can usually get home insurance after a failed home inspection. You will not be banned from coverage permanently.
After a failed insurance inspection, you could be asked to fix the problems within 30 to 60 days for your policy to remain valid. Otherwise, you may have to find a new home insurance company.
Insurance companies don't share data with each other, so being denied from one company doesn't prohibit you from using another company. However, your home's issues that caused the failed inspection may also be a problem with other companies.
If your home is being renovated, you may not qualify for a homeowners insurance policy during construction. In this case, consider a surplus lines policy, also known as builder's risk insurance or vacant property insurance. These policies are typically more expensive than a standard home insurance policy, but may provide necessary coverage while you renovate your home. After renovations, you can apply for a standard home insurance policy.
Frequently asked questions
Do you need an inspection to get home insurance?
No, you don't always need an insurance home inspection. However, an insurance company is more likely to request a home inspection if you live in an older house, one that hasn't been recently inspected or live in an area with more risks, such as windstorms.
Can you refuse a home insurance inspection?
While you have the option to refuse a home inspection for insurance, it's not recommended because you can be denied a policy or your rates may go up. In most cases, it's better to have the inspection.
Why does my insurance company want to inspect my house?
An insurance home inspection assesses your home's risks and your likelihood of filing a claim. This can affect how much you pay for insurance, or even if the insurance company will give you a policy.