After investing in a new home, purchasing enough homeowners insurance is a vital next step. To issue a policy, an insurance company will need to assess the value of your home, regardless of your purchase price. Once you buy a homeowners insurance policy, you also have to agree to a home inspection that will help insurers confirm the value of your property and whether you have the appropriate amount of insurance.
In some cases, a home inspection may result in property recommendations that you’ll need to address within a specified time frame, typically 60 days, or your policy will be canceled. Once this occurs, obtaining homeowners insurance will be difficult and even more expensive, and there will be another inspection and subsequent cancellation if those recommendations are not completed. Here’s what you need to know about complying with such recommendations and keeping your policy in force at the most affordable price:
The Evolution of Homeowners Insurance Inspections
In the late 1970s and early 1980s, the concept of home inspections in the United States was in its infancy. General contractors were often called upon for property assessments, as there were few dedicated home inspectors. However, it became evident that there was a significant gap in the inspection process, resulting in a lack of thoroughness and even litigation.
In one landmark case, Easton v. Strassburger, a homeowner sued her real estate broker following massive earth slides on her property that damaged her home and driveway. In another, a family sued the seller’s real estate brokerage after discovering severe problems with the foundation.
These cases and others led to the development of home inspections as we know them today. By the 1990s, home inspections were standard. Insurance companies also began using the inspections to determine the replacement cost of a home, the types of coverage individual homeowners needed, and the property recommendations needed to bring a home up to proper maintenance standards.
The Link Between Home Insurance Inspections and Property Recommendations
Before you sign your policy, you should understand how home inspections work. During a home inspection, professionals will check various vital areas, including:
- The age of your roof
- The presence of moss on your home, including the roof and siding
- Overhanging tree limbs near the roof
- Peeling paint
- Rotted wood on windows and decks
- Missing handrails or stair treads
The home inspectors are looking for three basic things by inspecting these areas of your home. They seek opportunities to increase your security and safety, preserve the integrity of the home, examine liability risks and potential fire hazards, and determine whether your property has mold or water damage. Carriers require that repairs to any items listed above be completed within 60 days.
After the inspection, the insurance company will provide you with property recommendations. These are requirements for improvements or repairs to your home that the professionals identified during the inspection.
Implications of Non-Compliance for Homeowners Insurance
When the inspection company provides you with property recommendations, you must complete repairs within a specified time frame (usually 60 days). The insurer usually will cancel your policy if you do not address the recommendations.
Additionally, your insurance rate could go up or down, depending on your inspection. Your premiums could rise when you fail to perform property maintenance or fix specific issues.
Stay in communication with your insurance agent to reduce the risk of increasing your costs or losing your insurance altogether. Discuss how you can perform the necessary repairs in a fair timeframe.
Staying Ahead: Proactive Maintenance and Risk Mitigation
To mitigate risk, investigate the most likely threats to your property. For example, if you live in a flood plain or a wildfire zone, you have a different set of risks than someone who lives near an earthquake fault. In addition to mitigating natural disasters and other emergencies, focus on general property maintenance.
Aside from passing your home insurance inspection, maintaining a safe and well-kept property can help keep your family safe and comfortable. Aged roofs and ceilings can collapse when in poor condition or result in leaks that spread unhealthy mold and mildew. HVAC systems that break down during extreme temperatures can devastate families. Keeping on top of general maintenance will help alleviate expensive repairs for major items in and around your home.
Homeowners Insurance and Subsequent Inspections Protect Your Property
Think of home inspections as a way to safeguard your investment and ensure you continue to have homeowners insurance. Take advantage of working with insurance professionals to maintain your property’s integrity and safety.
Contact a Brooks, Todd & McNeil Agent Today
If you need a new homeowners insurance policy or would like help reviewing a current one, a dedicated independent insurance agent at Brooks, Todd & McNeil can help. Our team can identify whether your current insurance coverage program is covering all of your exposures, assets, and insurance needs.
Whether you’re looking for homeowners insurance, car insurance, or any other insurance policies (life, health, business, umbrella, renters insurance, Medicare, and more!), we can help. As an independent insurance agency, we will compare policies from multiple carriers (we work with 87!) to customize an insurance program that meets your current needs, and as life circumstances change (i.e., a new home, new car, growing family, starting a business), we will assess your emerging exposures and recommend coverage to protect you accordingly. To learn more about our products and services, contact us today at (800) 448-4567.