An insurance company may want to inspect your home for one of several reasons. These are the top four reasons an insurance company will contact you to inspect your home:
- Your home value is higher than average, and the insurance company or your broker wants to verify the value with a professional inspection. When you first insure your home a broker may use a tool to do an estimated reconstruction cost of your home. But a broker is not a professional evaluator, they are only using a tool to help get an approximate estimate based on information you have provided. Any time there is a doubt that the basic calculation may be off, or if a home has special features, a broker or an insurance company may decide it is better to go and do an inspection to make sure you are not over-insured or under-insured.
- You have recently had major renovations or have ongoing renovations or a major change in your home value. In cases like this, the insurance company or broker may want to send an inspector to check the progress of the work or see what the total end value of the home will be. Again, this is to make sure everything is going smoothly; it gives the insurance company an opportunity to make recommendations for risk management and safety, and then also ensures that if you have a claim, you will be compensated properly.
- You have had a claim, and the insurance company wants to verify loss damage or progress of repairs. Any time you have a claim, an adjuster will visit your property and take a look at the damage. This is part of the claims process and helps the insurance company in determining the loss. Sometimes after a major claim, an insurance company will inspect the property to see how everything ended up once you rebuilt. Again, the main reason is to ensure the condition of the property and verify the reconstruction value for your insurance policy.
- You have auxiliary heating or other features in a home that can cause increased risks for claims.
What To Expect in a Home Inspection For Insurance
When an insurance company is going to inspect your property, they will usually contact you and make an appointment to visit the premises when you are available. It may seem intimidating to have the insurance company inspector come to visit, but it’s important to remember that the inspector is coming to verify the value of the home to make sure that you are insured properly.
Usually, a home inspector will do the following during an inspection:
- Take measurements of the living area.
- Take notes and pictures of any special features of your home or artwork or items of special value that you may want on record if you had a claim
- Identify any potential liability risks, such as stairs without railings or rooms full of clutter, that could be a fire hazard.
- Ask you questions about renovations and updates to heating, plumbing, electricity, water and oil tanks.
- Take note if you have any auxiliary heating like a wood stove or fireplace. They will also check to see if they are approved to safety standards.
- May ask to see your alarm system, or any other safety features you have in your home like water backup valves or sump pumps which help prevent water damage.
How to Prepare For a Home Inspection
You don’t need a lot of documents to prepare for a home inspection. Sometimes the inspector will ask for a copy of your certificate of location. This is to help them get the proper measurements of the home, as well as become aware of any special situations or acquired rights on the property lines.
You may also consider having a copy of your alarm certificate handy so that the inspector can confirm the type of alarm system you have and make sure you get all the discounts.
What Happens After A Home Inspection?
After a home inspection, the inspector will likely tell you any observations they think are important. They will not be able to tell you the reconstruction value of the home on the spot, but often they can tell you about recommendations they will be making. This is also an opportunity for you to ask questions and get clarification.
A home inspector can not give you advice about your insurance policy, or make any promises or demands. They are simply there to make a report for the insurance company, of which you will eventually have a copy.
Once the Inspector Leaves: What’s Next?
The inspector will go back to their office, and they will work on the calculation of reconstruction of your dwelling. In addition, they will prepare any photos they took that are relevant, and they will write out a list of recommendations for the insurance company to review.
The insurance company will then receive a copy of the inspection and review themselves and decide if they agree with the recommendations (if any) and make sure the insurance policy you have is in line with the information collected during the inspection.
After the insurance company reviews all of the above, they will forward a copy to your broker or insurance representative who will be advised what, if anything, needs to be done. The insurance broker is your representative, so they will then relay to you what needs to be done, if anything, and the results of the inspection.
The Insurance Company Made Recommendations. Do You Have to Do Them?
If you receive recommendations in your inspection, it will usually be stated if the recommendation is:
- Urgent or mandatory (usually within 30 days, sometimes immediate)
- Necessary (sometimes also within 30 days, but may be less urgent)
These may be coded with colors as well. There will always be a legend in your inspection report telling you what each kind of recommendation means.
It is not unusual for an inspection to have many suggestive recommendations, and possibly one or two necessary ones. Don’t become alarmed if you see a list of 10 recommendations; they may all just be helpful tips. Check the legend of the document to understand what is urgent, necessary or just suggestive.
Always speak to your insurance broker when you get feedback from the inspector or when you receive your inspection report. As brokers we are here to help our clients. We review inspections with them, and if something is urgent, or necessary, we can look at the details. Sometimes there are mistakes in inspections, so talking over the details of the report can help you review with your broker what needs to be done and when.
The Value of My Building Changed Following an Inspection
When an inspector visits your property they are certified and skilled individuals in calculating reconstruction cost. It sometimes happens that a building value will be adjusted following an inspection.
Once an inspection reassesses building reconstruction cost, the insurance company will change your policy. Normally you are given a reasonable delay to review the inspection if the change was unforeseen. However, expect that following the notification that the building value is being adjusted that the change will likely be transacted within 15 days. If you need to discuss the change, it is important to do so with your broker or insurance representative, as soon as you get a notification. This will ensure that you have time to review the situation before any charges or changes occur on your insurance.
Can an Insurance Inspection Cause an Insurance Problem?
Most of the time insurance inspections just allow verification that everything is okay with a building value, that your home is safe, and provides tips for avoiding risk of fire, theft, or other liabilities. The insurance inspection is there to give you a sense of assurance that you are insured properly, and is meant to be a helpful experience. The only time an insurance inspection may be foreseen as a “problem” to you will be if you get recommendations that are urgent and immediate, or have serious damage in your home that may cause a risk to yourself or others (such as water leaking through the roof, or balconies without proper railings, for example).
As brokers we are here to help you. Should you have any questions about an inspection to your home, ask your broker for help. In most cases a good conversation can clarify reasonable situations and make the experience a good one.