A well-written insurance policy will protect your home from all sorts of risks, like theft, injury and natural disasters. To provide that kind of security, insurance carriers rely on property assessments. Even though insurance applications seem comprehensive, your insurer will likely need more information. So don’t be surprised if your insurer plans a home inspection.
Welcoming a stranger into your home may not be your idea of a good time, but it’s necessary if you want your insurance policy to accurately reflect the current value and condition of your home. Think of it like getting your new engagement ring appraised so you could replace it should it ever fall off your finger.
More providers, like Hippo, are using big data to simplify and expedite the underwriting process by verifying the value and condition of some items in advance.
Here’s what to expect, if you plan to have a home inspection scheduled for your home.
How home inspections work
Home inspections are part of the insurance underwriting process will take an average of 30 minutes, but can last up to 2 hours depending on your property.
Inspections often happen during a period that lasts anywhere from 30 to 90 days, depending on the state your property is located in. This is essentially the time when an insurer can back out if they learn about a risk that wasn’t clearly listed on your application. They can also adjust your policy if the estimated replacement cost is inaccurate or there’s isn’t enough coverage.
An inspection may be ordered before your insurance policy becomes active. As a homeowner, you determine the policy timeline and there’s no steadfast rule for when it must begin. In fact, policies are often bought for the future before a home is built, sold or undergoes maintenance.
When your property needs an inspection, you should expect to receive an email or phone call from your carrier. They will not show up at your doorstep unannounced.
If they are just going to take external photos of your property, you won’t need to be home. If they need to go inside, they’ll work with you to schedule an appointment. During the appointment, they’ll be looking for specific risks on your property. The inspector is likely not the best contact to ask about details of your insurance policy since they are usually local third-party contractors sent by insurers.
Types of home inspections
Homes are evaluated based on the risks they present. That means your current home inspection may be different from your last property inspection. The age, size, location and cost of your home can all affect the outcome of your inspection.
Newer homes may not require an interior inspection. Instead, someone may just come by with a camera and take pictures of your home. Older homes, however, often require an interior and exterior inspection. An old home’s HVAC, electrical and plumbing systems are more likely to be outdated and may become hazardous if they are not replaced. The overall condition of your home is also more likely to have deteriorated.
Your carrier may also want to learn more about the construction of your home. Inspections help them decide if you need an earthquake or flood insurance policy supplement. If the value of your home is over $1 million, your inspection may take longer than usual and require a specialist. This is known as a high-value inspection.
What inspectors look for
Home inspections have two purposes: to accurately appraise your home’s replacement cost and to identify any existing risks that need to be addressed.
- Replacement Cost: Homeowners don’t usually estimate this correctly on their applications, since it’s not most people’s job to understand all the costs involved in replacement cost estimates. The replacement cost of your home is different from your home’s market value. It factors in the cost of labor and materials needed to rebuild your entire home, as well as the specific interior features included in your home. This helps determine the price of your insurance premiums. Companies that already have accurate information about your home may not need to check these details during your inspection.
- Property Condition: All inspections include an evaluation of potential hazards and possible areas of liability. Your inspector will check your roof, siding, yard, gutters, staircase and plumbing system. If there are any issues that could lead you to file a claim, they will note it. They will also assess whether you take care of your property. Insurers refer to this as “pride of ownership.” They will probably take a look at your security system, too. Insurers want to know that you are doing your part to prevent losses, which means having fire alarms, smoke alarms and antitheft locks in place.
The best way to prepare for your insurer’s home inspection is to keep your home in the same shape and condition that you’d like it in if you ever needed any parts of it replaced.
What happens next
If the inspection doesn’t reveal anything unexpected, your policy will remain active. Should an inspector determine your home’s replacement cost is too low, your policy will be corrected and your premiums will likely increase. Your premiums could also rise if the inspector finds more risks or threats than were previously accounted for. On the flip side, if your home is safer than you thought, you may end up with a discount.
If anything is identified that could jeopardize your coverage, your carrier will notify you. They’ll let you know what the problem is, explain how to fix it and provide a timeline for having it fixed. Once repairs have been made, you should send in receipts and photos that show the changes.
Some carriers will make you aware of certain issues even if they aren’t related to your insurance policy. This may be a matter of routine maintenance, but it should still be taken seriously.
If you do not fix the issues your inspector identified by the deadline or provide proof that you’re in the process of fixing them, you may receive a cancellation notice. That’s your last chance to make sure your property is in tip-top shape. If you fail to respond to your insurer’s queries or address the issues at hand, your policy could be voided.
Remember, the contractors that come to inspect your home are taking notes and photos on your insurer’s behalf. They are not underwriters and the outcome of the inspection is ultimately not up to them. Your carrier decides what actions need to be taken. Most providers will work with you to ensure you’re fully protected.
Still have a pressing question about home inspections? Speak with a Hippo Specialist who can address any concerns you have about inspectors and how their report affects your final home insurance policy. We’re here to help!