If you’re about to buy a home or change insurance companies, did you know the insurance company will perform an inspection of your home? Inspections are performed on homes, rental properties, town homes and in some cases condos. There are three types of home inspections for Texans
- Drive by inspection
- Walk around inspection
- Interior inspection
In the drive by, the inspector is not required to get out of the car as long as everything is visually in order. If the inspector notices something, has a question or something prompts them, they will get out of the car and may walk around the home taking a closer look at the roof, trees, etc. If the home is 4,000 square feet or bigger (the exact square footage varies by company) or has a value of $400,000 or more (again this varies by company), the insurance company will schedule an interior inspection.
In all three cases, they are reviewing the home to make sure it meets with their underwriting standards. In the first two cases, most inspections focus on the condition of the house including;
- Do tree limbs brush against the roof
- Is the roof in good shape and does it appear to be 15 years old or younger
- Are there holes in the walls of soffits
- Are there any cracked or broken window panes that need to be replaced
- Is the foundation in good shape
- Is there any peeling paint
If the inspector comes up with things that need to be done, the homeowner is typically given 60 days to get the items taken care of. Once that’s done, photographic evidence is submitted to underwriting and the policy remains active. If the homeowner doesn’t take care of these items then the company will most likely cancel the policy.
Interior inspections are typically only performed on high value homes. These are homes that have 4,000 or more square feet and/or an insured value of $400,000 or more. The purpose of an interior inspection is to determine if the home is adequately insured. An appointment is scheduled with the homeowner and a high value home inspector who will walk through the home notating the level of finish out, square footage, and more.
Once they get back to the office, they’ll complete a report, note any repairs that are needed and conduct a replacement cost evaluation. It’s not unusual to see an underwriter come to the agent and review this report either requesting or suggesting the valuation of the home be changed. If the underwriter’s numbers are not too different from the insured value of the home, changing the valuation may be optional and up to the homeowner. If the amounts vary widely, most adjustments are typically mandated.
I’ve had conversations with homeowners after all three types of inspections were performed. There have been instances where a homeowner needed to paint a section of a home, repair holes, trim trees & shrubs, or provide proof of foundation repairs. I’ve even contested a high valuation recommendation to add over $350,000 to the dwelling value. In each of these cases, the agent is not dictating what must be done but partnering with the homeowner to determine how these items will be resolved.
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