Why do Insurance Carriers Inspect Properties?
The bottom line is insurance carriers want to know what they’re insuring. This is particularly important to them for homeowners insurance policies. It’s really difficult for an insurance carrier to cancel a homeowners policy after 60 days in Pennsylvania. So carriers want to give a thumbs up or thumbs down to a property right away.
Other properties such as businesses and rentals may also be subject to inspection. But the laws around cancellation aren’t nearly as strict. So we’ll focus on home inspections but the principles should apply for just about any property.
What do Insurance Carriers Look for During Inspections?
In reality there are only 2 things the inspector is looking for. They are liability issues and property issues. Basically they want to make sure that no one will get hurt because of a property condition, and they want to make sure the property itself won’t get damaged.
So here are some of the most common issues that I see turning up in insurance inspections.
- Damaged steps. This one seems obvious. If the steps are in disrepair, someone can easily fall and hurt themselves. A very common condition is a missing railing.
- Roof damage. Common conditions are missing or curling shingles. These are signs it’s time for a new roof. But some carriers will not even accept a roof with nail pops. This is when there is a bulge in the shingle from a nail working its way out from below.
- Cracked sidewalks and driveways. Here’s another example of a liability issue. Any time a crack creates a tripping hazard the insurance carrier is sure to object.
- Attractive nuisance. My favorite. This is anything from a pile of wood to a broken down car. If kids would want to play on or around it, then it’s an attractive nuisance and you could be held liable.
- Swimming pools and trampolines. Oh these liability nightmares. I feel bad for my kid. He’ll never get to own a trampoline. His parents are insurance agents and know how dangerous they are. Too bad kid. Hopefully a neighbor has one he can play on! Okay, back to the point. Each insurance carrier has its own requirements for fences and safety nets, etc… when it comes to pools and trampolines. They’ll definitely be looking to make sure underwriting guidelines are met.
- Peeling Paint. The paint on your siding, soffit and fascia is not just cosmetic. It’s there to prevent damage to the wood underneath.
- General Disrepair. Insurance carriers want to see pride in ownership. People who maintain their properties are less likely to have a claim. So if your grass looks like it hasn’t been cut… ever… then the carrier may take issue.
What happens if you don’t pass your inspection?
If there are inspection issues on your home you’ll be receiving a recommendation letter from the carrier. This is one of those pieces of mail that you’ll want to open. It will tell you what problems there are with your property and lay out a timeframe to fix those issues.
If you have questions about your specific situation, call your agent or broker right away. If you want to read more about carrier recs, click here.