Insurance Four Point Inspection
Polybutylene plumbing, aluminum branch wiring, old water heaters, older roof coverings, Federal Pacific electrical panels, knob and tube wiring, electric fuses, open flame heat sources are all just a few of the insurance buzz words that are coming back. These issues can cause a deal to go south faster than the flick of a switch, especially if the Buyer or Realtor requesting insurance coverage right before closing without the necessary inspection reports. Making last minute updates or agreements to fix or replace major components of the home will delay closings and possibly cost the sale of the home. Most insurance carriers will require a remaining functional roof life of at least three years if not five before they will write an insurance policy. Homes that are for sale with composition shingle roof coverings 14-16 years old therefore are at risk for early replacement. This may and has resulted in some roofs being replaced before the end of functional life, just to facilitate insurance coverage. The presence of polybutylene piping or a Federal Pacific panel for example will warrant replacement prior to closing. None of these make a happy Seller or Buyer especially in today’s market having to go back and re negotiate the contract. I hear you say, “the current owner has insurance, why can’t the new owner get the same? The fact is many times homes are grandfathered to the new underwriting guidelines, and as such may not be subject to such rigorous inspections and requirements. The same home has also aged and now may be a higher insurance risk than before. Proactive Buyers are changing the way they purchase real-estate due to insurance changes. It all starts with the listing agent, who is responsible for getting the home ready for sale. By understanding the insurance bottlenecks and having the necessary insurance inspections complete will prevent unwarranted issues and surprises. To achieve an inspection report that is designed to protect the Buyer or Homeowner, you must hire an Inspector that understands both insurance and real estate transactions. On a positive note, Buyers can maximize their insurance credits and discounts by providing the insurance agent with a Wind Mitigation Inspection along with the Four Point Inspection. This in many cases, particularly for newer homes or homes with new roof coverings (2002 or newer) will result in additional insurance discounts, which may offset the additional cost of older home insurance. Discounts will vary, and depend on each home. We have witnessed insurance discounts on applicable homes from as low as $100 to as high as $1000 per year depending on the location and sustainability of the home in question. With each wind mitigation certification lasting 5 years and Four Point Inspection these savings can be substantial. Discounts for each home will vary, buyers or homeowners should talk with their insurance agent and inspector on the benefits of having a wind mitigation inspection
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